‘Perfect Storm’ Brewing as Business Rates Catastrophe Looms

£1.8bn burden, 240,000 appeal backlog & ‘High Inflation’ till 2016 stifling ailing businesses and crippling high street.

To worsen an already bleak outlook Government is looking to delay business rate revaluation till 2017 (instead of 2015) meaning that rates will continue to be based on all-time-high 2008 values before the recession took hold.

The final blow could be the recent Bank of England statement that inflation will remain high until 2016 – business rate increases are linked to the Retail Price Index – making a 10% rise over the next three years a real possibility.

Despite this, the current business rate appeals system is slow and bureaucratic with almost a quarter of a million appeals awaiting review, equating to a £1.8bn burden on British businesses.

CVS, the business rates specialist, is calling for immediate action to prevent 2013 becoming the worst year in living memory for British business. Recommendations for system reform include;

Business Rates Freeze for 2013/14 – to ensure businesses do not experience further increases while the government finds a long term solution to the business rates slow and bureaucratic system.

Rates linked to CPI (lower than RPI) or capped at 2% per annum.

Cut red tape in the appeals system – to reduce the 240,000 backlog urgently a more open dialogue between VOA and rate payers will be essential.

However, the implication of no action being taken could be the difference between survival and demise, so businesses are urged to challenge increased bills to secure reductions where valuations are no longer accurate – successful appeals reduce rates on average by 9%.

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