MPs, business groups and owners have been up in arms about the imminent revaluation of business rates, amid warnings that the changes could lead to “eye-watering” bill rises for some businesses.
Rates, which are a tax on non-residential property, such as pubs, shops and warehouses, are being updated for the first time in seven years this year to bring them into line with property values. However, there are concerns that in areas where property values have shot up since the last review, some businesses, particularly those occupying prime real estate positions, could be faced with massive hikes or even go under.
The amount businesses pay is based on how much annual rent could be charged on the premises, which is known as the rateable value. This is combined with the multiplier, which is a figure set by the Government.
The changes come into effect on 1 April and the Government has been insistent that, according to their estimates, the new valuations could even mean bills going down in some areas. However, many of the areas facing hefty rates rises are located in the Conservative heartlands, with the Home Counties facing some of the biggest increases. The Chancellor has consequently faced the wrath of many Tory MPs whose constituents are worried about their businesses.
Even former Conservative Part Chairman, Grant Shapps, has questioned the Government’s figures, while ex-business minister Anna Soubry tweeted that business rates are unfair and should either be radically reformed or scrapped altogether.
Many believe that the Government’s figures have been underestimated because they do not take into account inflation or “appeals adjustments”, which the Government adds to its calculations.
However, Chancellor Philip Hammond has told Tory MPs that he is “listening” to their concerns and there are hints that he could seek to mitigate the impact of the changes next month, when he unveils his Budget.