New plan for business rates to address growing fears.Posted: February 28, 2017
Labour is responding to fears about the impact of looming business rate hikes for some businesses by calling on the government to set up an emergency ‘transitional relief fund’ and take a series of measures to ease the business rate burden for business. Portsmouth’s Labour Leader, Cllr Stephen Morgan has backed these calls.
Business rates revaluation due to come into effect on 1 April have caused uproar as it has emerged that the average small shop will be hit by an extra £3,663 in rates over the next 5 years, while many large online retailers will see their rates cut.
The big four superstores – Tesco, Asda, Sainsburys and Morrisons – will see a 5.9% reduction in Rateable Value, while online retailer, ASOS, will see their rates bill fall from £1.17million to £1.14million, despite reporting UK retail sales growth of 18%.
The changes have led to calls from businesses to reform the business rates system so that it better reflects changing shopping patterns.
Labour has developed a five point plan to help business survive the revaluation and develop a system of business taxation suitable for the 21st century.
The plan includes setting up an emergency transitional relief fund for businesses facing “cliff edge” increases in their rates, and revise the appeals process to ensure businesses get a swift and fair hearing; bringing forward CPI indexation so that businesses aren’t paying more because of how inflation is measured; excluding new investment in plant and machinery from future business rates valuation; and; introducing more regular valuations in law to stop businesses facing periodic, unmanageable hikes.
Cllr Stephen Morgan, Portsmouth’s Labour leader said:
“Fundamental reform of the business rates system is much over due. We need to ease the burden on our high streets and town centres in the age of online shopping; support the traditional fabric of our communities, including community pubs to protect them from closure; and create a fairer system of business taxation.
Too often we hear of pubs and restaurants in our great city of ours at risk of closure. It cannot be right for small businesses to be facing massive hikes while international online retailers have their business rates cut.
Now is the time for a better national plan for business rates”.
Mike Cherry, National Chairman at the Federation of Small Businesses, said:
“Business rates are an outdated tax. FSB is keen for all political parties to help those small firms hardest hit by the current revaluation, and to start to focus on fundamental longer-term reform of business rates to make sure it’s fair for small firms. It is incredibly important to support small businesses and the self-employed so they don’t face shock tax rises, so we are delighted to take part in the roundtable.”
Andrew Silvester, Head of Campaigns and Deputy Director of Policy at the Institute of Directors said:
“It’s hugely important that politicians on all sides look for constructive ways to reform business rates. This is a 20th century system and in a 21st century economy it looks painfully out of date.”