Tim Jones: Business Rates - more bad news?

For the average small business across Northern Devon, survival has been the main focus for at least the last six months.

For well published reason - Covid Recovery, inflation, high energy bills, staff and skills shortages, increasing rises in interest rates, political uncertainty and the fear of what might happen next as a result of two ugly wars - board rooms and business owners are having to concentrate all their efforts on risk management.

There is always the hope that the Government might provide a life line but in reality the opposite has occurred with increases in taxes dominating policy. This is unlikely to change whilst levels of the National debt remain so high.

If you thought you had seen the worst then think again. There is another potential increase in the system.

Business rates are much maligned, but provide Whitehall with a big slug of revenue.

Business rates are due to be recalculated in April 2024 using the government’s multiplier which is typically pegged to September’s (2023) rate of consumer price inflation (CPI). This figure is 6.7 per cent.

This would result in an increase of nearly £2billion in the next financial year. This represents a rise from 51.2p up to 54.6p.

The impact of this is felt by all sectors but disproportionately affects those in expensive high street locations such as retailers, restaurants and pubs.

Those who escape are the increasingly numerous online retailers who pay a tiny fraction by comparison with their market share.

The prophets of doom have feasted out on this prospect using words such as ‘final nail in the coffin’ and this level of increase would be ‘unfathomable and insurmountable’.

We should recognise that the Government put a support package in place for Covid recovery of £13.6bn, that freezing the increase for the past three years has saved business an overall £14.5bn and that one third of businesses do not pay business rates at all due to tax relief.

Whatever your circumstances a 6.7 per cent increase is a major blow.

Now is the time to lobby local MPs to make sure a strong voice is heeded by Jeremy Hunt as he contemplates the Autumn Statement.