What’s happening with the change in business rates?
You may have heard something recently about the new business rates to be introduced from April 2017. The government’s stance was that they would have a neutral effect and that most businesses would see a drop. However, that argument has been challenged in recent days and the government has even faced some rebellion from within its own ranks on the subject.
How are Business Rates Calculated?
Business rates are charged in proportion to the value of a property and changes in that value are usually outside the control of the person living in it or the businesses that are operating from it. This adds to the feeling of unfairness about this rise as businesses based in areas going up in value, will see their rates going up accordingly, even if their profits do not reflect this.
The increase in business rates this time will be even larger, since the government delayed the last increase (due in 2015) to 2017 to avoid it coinciding with the general election. Cheeky. London-based businesses could see a rise of as much as 100% or more but most will be well under that percentage.
How will this affect you?
Well, it will affect all businesses differently. Businesses based on London high streets will likely see some of the sharpest increases. Many business rent space in serviced offices, so they will not be liable for the business rates rise on an individual basis, but they are likely to see their costs go up over the coming years as serviced offices pass on the costs.
Can you appeal?
Yes, the government has been reforming the appeal process and as part of that reform the Valuation Tribunal of England (VTE) can order your rate to be changed if they find it was outside the bounds of reasonable professional judgement.
The new rates may be softened.
Following the controversy over the last few days, where the government’s numbers have been questioned and found wanting, many believe that ministers will move to soften the impact, and save their reputations. The chancellor Philip Hammond has indicated that he is “listening” to concerns, which is hardly surprising since many of the hardest hit areas are considered to be Tory heartlands! But it has been suggested that he will announce a lengthening of the transition period, when he makes his budget statement in March, and this should ease the pain a little bit. Until then, the confusion may rage on, so, watch this space.