Lobby groups represent over 100,000 UK retailers and businesses, have called on chancellor George Osborne to focus on “reducing the burden” of business rates as a matter of urgency through the use of consumer prices index as a benchmark for the rates system due to the expectation of business rates rising by £400m.
With a prediction of a £400m rise in business rates, lobby groups such as; Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC) have written to George Osborne urging him that after the Brexit vote to change the business rates system .
A switch to the more commonly used consumer prices index from using the retail prices index is advised by the letter. In addition the letter suggests the ratings system should encourage investments in machinery whilst reducing the number of appeals by making the process simpler for small businesses.
Business rates or non-domestic rates, is a tax on the occupation of a non-domestic property. Properties are assessed in a rating list which is given a rateable value based upon the annual rent from a certain date. This is determined based on details for similar properties within the area. The property occupier, either the owner or the leaseholder, pays the business rates.
Business rates are paid to local authorities, which help finance local services. Approximately £23.5m will be raised this year alone through business rates. In the 2016 budget, Osborne pledged to double small business rate relief from £6,000 to £12,000 from April 2017; a move he said would enable 600,000 businesses to pay no rates.