Business rates relief will not serve as long-term solution

Businesses in Southwold protesting about business rate rises. The government has finalised the distr

Businesses in Southwold protesting about business rate rises. The government has finalised the distribution of a �300m discretionary rates relief package announced in the budget. Picture: Archant

A £9.2m business rate relief fund for East Anglia's hardest hit companies will not provide a long-term solution to the impact of rates rises, a campaigner has claimed.

The Department for Communities and Local Government has finalised the distribution of a £300m discretionary rates relief package, announced by the chancellor Philip Hammond in March's budget.

According to data from business rates and rents specialists CVS, Norfolk is set to receive just under £4.5m and Suffolk will get £3.2m, which can be used to help the businesses hit hardest by this year's business rates revaluation. Essex will receive a further £1.5m.

But the secretary of the Southwold and Reydon Society – in the authority allocated the largest share of Suffolk's funding, Waveney – says the relief package had been 'heavily fronted-loaded' with the vast majority coming in the first year – while the full impact of the revaluation will not be felt for another five.

Philip O'Hare said: 'Obviously it is good news that there is some relief and Waveney rightly should get a big slice of the pot. But there is a fundamental problem with the pot – almost all of the money is going in the first year, but the rates increases will gradually get bigger over the next five years.

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'Years four and five will be exactly when these businesses will need the most relief.

'It is a temporary fix to a much bigger problem.'

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He added that a 'fundamental change' was needed in business taxation, with the current system having 'perverse effects' on towns like Southwold.

'Calculating it on the value of the property hits high streets hardest, but it is the high streets we want to preserve, particularly those like Southwold where there is a high number of independent businesses.'

Mark Rigby, chief executive of CVS, said: 'I am heartened that the department for communities and local government have sought to clarify their stance over this important and much needed initiative and I would now urge the councils across Norfolk and Suffolk to expedite the distribution of this relief to those firms hardest hit by the revaluation.

'Business rates bills have already been sent out and the first tax instalment has been collected, so it's vital that available relief is granted to those who need it as urgently as possible.'

A DCLG spokesman said it would be up to councils to devise their own schemes to distribute the funding to local firms.

'A temporary sweetener'

Funding has been allocated to districts depending on the expected gross rates increase in 2017/18.

Waveney and Suffolk Coastal will receive the biggest slices of their county's fund – £715,000 and £695,000 respectively – while in Norfolk, the north of the county has the lion's share with £904,000 and Norwich comes second with £830,000.

However, 60% of the funding will be delivered in 2017/18, with less than 2% left by 2020/21.

Jason Bumphrey, who runs the Foundry Arms in Northrepps, is in the process of appealing his business rates rise from £240 to £3,300.

He will benefit from a £1,000 grant to mitigate the rates rise – promised to all pubs in the budget – and is receiving 'transitional' relief from the government, but he is concerned about what will happen once these aids are gone.

He said: 'It is our living, and we have 14 people depending on their salaries from us, so we have to keep going.

'They are giving businesses a temporary sweetener to brush the issue under the carpet, but once they have gone you will be left with a huge bill to pay.

'North Norfolk is a very much tourist-based area, so we are very seasonal – the winter months can be tough, especially in small villages like ours. I 100% rely on having a good summer.

'A lot of little businesses need that relief to help absorb many other increases. Wages and product costs are rising so every bit of help is a welcome relief.'

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