Business rates hike will ‘potentially finish small businesses’

Small business owners have spoken out about the shake-up in business rates that threatens to hit the smallest companies the hardest.

The Chancellor has addressed the concerns of business owners in regard to business rates

The Chancellor has addressed the concerns of business owners in regard to business rates

Small business owners have spoken out about the shake-up in business rates that threatens to strike the smallest companies the hardest.

James Blackman, managing partner at Cocoonfxmedia says that an increase in business rates combined with Brexit looming could ‘potentially finish small businesses’.

‘Since this government has come in, business has been taxed at every opportunity from lowering the tax free allowance on dividends, auto-enrolment, national living wage and now this increase in business rates,’ he says.

Blackman adds that an increase in costs through exchange rates on imports will compound the negative effect of business rate hikes. ‘For example software costs have gone up by 13-22 per cent. If a business’s fixed costs go up the prices will go up. That will mean everything from milk to your takeaway will increase while your wages will stay the same.

‘Its just crazy. The government should look at reducing the costs for business so the economy should grow. Make it law for invoices to be paid within 30 days.’

Paul Simbler, director at HOB Salons says that the new business rates are exactly what businesses don’t need, pointing to ‘sky high’ rents in London as a barrier to trade. ‘Some businesses are on the edge and all it will take is a little push to finish them off.

‘The government is completely out of touch with what’s going on and the longer they don’t listen to high street retailers the worse it will get.’

Simbler believes that the whole rating system needs to be abolished. ‘It’s just another tax for businesses like VAT, corporation tax, income tax, etc. It feels like we’re all working for the government, if they actually looked at how much revenue was lost from businesses going bust then maybe they would rethink completely and do something to help.’

The picture outside London

He adds that, as a brand, his company will be much better off concentrating on towns outside London that still have great high streets. ‘As for the River Islands and H&Ms of this world it probably won’t make that much difference, these larger organisations need a foothold in central London.’

However, outside of London the picture remains grim for many business owners. Samantha Harvey is managing director of Yorkshire-based One World Travel, which has branches in Wakefield Beverley and Yarm, and is facing a 100 per cent increase in business rates in Wakefield while they are staying the same for the branches in Yarm and Beverley.

‘Of these three places Wakefield is the one most in need of action to revitalise the city centre and this policy could have the opposite effect,’ she says.

‘I appreciate everything the government has done to grow our economy, both nationally and here in Yorkshire, while the council has managed the decline of Wakefield’s retail offering. This situation calls for a rethink as it isn’t just businesses in London and the South East that are facing sharp increases.

‘What should be a thriving shopping district with aspirations of rivalling other cities like Leeds and York has become desolate.’

Further reading on business rates

Nominations are now open for the British Small Business Awards 2017, the leading event celebrating the brightest stars in the SME sector. Click here to enter. Good luck! 

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