A significant proportion of small businesses across Bedfordshire are preparing to reduce investment and staff costs, according to the Federation of Small Businesses (FSB).
UK-wide research finds that more than a third of small firms expect to see their business rates increase from April 1.
Of those facing a rates rise, a substantial proportion of FSB members say their business rates will eventually rise by more than £1,000 per annum. And one in five will see their annual bill increase by more than 40 per cent. Such drastic hikes could have massive consequences for the growth of those small businesses hit by this rates bombshell.
Ian Cording, FSB branch chairman for Bedfordshire said: “The business rates system is an unfair, regressive tax which hits small businesses before they’ve had the chance to make their first £1 in turnover, let alone profit.
“The £300 million discretionary relief fund for local authorities to target those businesses most in need is a very welcome short-term measure – but we are concerned that the fund may not be big enough. It is vital that Government and our local councils communicate immediately with their local business population to explain how this fund will work. The formula needs to take into account those in the South East who are hardest hit.”
Ian added: “The seven year gap between this year’s revaluation and the last has stored-up all kinds of problems for us. FSB has called for more frequent revaluations.
“I am disappointed that this now won’t happen until 2022 at the earliest. In terms of fundamental reform of an outdated system, we are calling for a review to consider what a fair, modern business tax system would look like.”
Businesses set to lose small business rate relief will be helped by the cap of £50 per month set on any increase.
In addition, smaller, independent pubs will benefit the most from the proposed £1,000 reduction to their rates bill this year.
Of the one in three small businesses facing a rise in rates, more than half expect profits to fall and four in ten are set to increase prices. Crucially, 55 per cent plan to reduce, postpone or cancel investment in their business, which will hit UK productivity and growth.
The survey data indicates that of those small businesses facing an increase in their business rates, almost one in five may ultimately consider closing down or selling their business as a result of the hike in their bills.
FSB member, Jim Campbell who owns Country Taverns Ltd which includes The Birch in Woburn and the Black Horse in Ireland has been hit exponentially hard by the revaluation.
Jim said: “Of course we will l ultimately find a way to carry on but the current level of anxiety for me and others within the small business community should worry those in charge.
“The costs of doing business for small businesses are now at their highest levels since early 2014. The last thing we need is a business rates burden so heavy that it threatens the future growth prospects for me and other local businesses.
“To add insult to injury, when we need to challenge our revaluation assessment we are now faced with a new but rigged appeals system which will prevent us from being able to seek justice and redress.”