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Business rates proposals 'the final nail in the coffin for high streets'


Some small business owners believe rises may force them to move premises or derail ambitions to expand

Some small business owners believe rises may force them to move premises or derail ambitions to expand

Some small business owners believe rises may force them to move premises or derail ambitions to expand

The Government has been accused of hammering the "final nail in the coffin" of high streets and betraying small businesses over plans to update business rates.

Ministers have faced a backlash over proposals to change rates for the first time in seven years, which will come into effect in April.

London mayor Sadiq Khan fears the £900 million rate hike in the capital could force businesses to close and has urged Chancellor Philip Hammond to protect them from increases.

Some small business owners believe rises may force them to move premises or derail ambitions to expand.

Simon Butterworth, who runs IT support company Sibit in the Berkshire village of Crowthorne, says his rateable value (RV) - which determines the rates he pays - has more than doubled, from £6,500 to £15,195 for his 48 sqm premises.

According to the Valuation Office Agency, he says, his rates bill will rise from £262.17 in 2016 to £3,369 - an increase of around 1,200%, far above the 5% limit for small properties suggested in a government briefing paper published last month.

Mr Butterworth told the Press Association: "We are going to move because of this.

"It's the final nail in the coffin for high streets. You can't expect people to open new businesses when the upfront costs are so huge."

The parish councillor, whose company employs five staff, said there is a marked disparity between new RVs in the area for near-identical businesses, and suggested figures had been "cherry-picked out of fresh air".

He said: "The company above us, which is pretty much the same footprint but an office, not a shop, on their old rating was £4,800, on the new rating is £5,000.

"They've gone up by £200 in the new rating, we've gone up by £9,000."

Mr Butterworth suggested rising rates could lead to high streets having more charity shops, as they have significant exemptions for business rates and would provide landlords with incomes on potentially otherwise empty properties.

And he said supermarkets in Crowthorne are being handed unfair advantages over independent retailers, with small RV increases on already lower valuations compared to swingeing rises for the local shops.

He said: "It is unjust, not fair and frankly scandalous."

There is similar consternation among rural businesses.

Emma Woods owns Duncombe sawmill in Helmsley, North Yorkshire, a company of eight employees producing bespoke wooden buildings, fencing and garden furniture.

The sawmill's RV has risen from £15,750 in 2010 to £25,750, up 63%.

Mrs Woods is yet to discover what her actual business rates will be, but is braced for a "huge difference" that will curtail investment in new products and machinery.

She said: "Although we're classified as a small business due to our turnover and the number of staff, from the ratings point of view we miss all the small business relief because of the banding they've put us in."

Another frustration is a lack of explanation for the rise.

She said: "We've had no increase in services. We're on a small industrial estate on a private road, all the businesses fund the road repair so there's no maintenance.

"We don't have any refuse from the council - we have to pay for that - so I'm not quite sure what we get for the rateable value going up.

"We don't get any services anyway where we are, so to pay any lump sum for no obvious services is actually quite hard to take."

Mrs Woods said the increase in rates is compounding market insecurities already there because of Brexit, and questioned the Government's commitment to small businesses.

Awarded an MBE last year for services to rural business and skills in North Yorkshire, she accused the government of making things harder for small organisations, rather than offering them a helping hand.

She said: "On the one hand, we are being acknowledged for trying to do something different and revive old skills and keep traditional businesses going, but the government isn't helping support that at the moment."