Small businesses make a huge contribution to the British economy, employing millions of people and offering vital services to our communities.
But the recent recession has been tough on these firms, with declining economic confidence and credit pushing many to the brink.
Business rates is often the third highest expenditure for many small firms, after wages and rent, but the Government has failed to help small companies with business rates during the recession, and instead have repeatedly added to the rates bills of many, taking an extra £8.4 billion in rates in the three years since 2007-08.
Part of this increase came back in April 2009, when around 100,000 small businesses faced a sudden £100 million rise in extra business rates when the transitional relief scheme from the 2005 Revaluation expired. Despite knowing four years in advance that these sudden rises were coming, the Government’s emergency Deferral Scheme wasn’t even announced until 2009 bills had been sent out, and to date has only helped a tiny fraction of firms.
Worse still, Ministers are planning to push ahead with the 2010 Revaluation, which will mean destabilising business rate tax rises for many firms from this April, as they struggle to recover from the recession.
At least 4 in 10 companies will see increased bills as a result of this revaluation, when the Government starts using new property values to calculate companies’ tax bills. In 8 out of 9 English regions, twice as many businesses face a 20% increase in bills compared to a 20% decrease.
Conservatives are opposed to the Revaluation, as this is not the time to hit companies with large tax rises. By scrapping the revaluation, all companies will still benefit from an inflation-based decrease in bills, but without the large rises for others.
We will continue to pressure the Government to postpone the revaluation, and have held two Opposition Day Debates specifically on business rates on 25 March and 15 July to highlight our concerns with these rises.
Ministers need to realise that it is time to give small companies a break, not add to their problems.
Comment by Faisal Butt on February 8, 2010 at 1:15 pm
labor has failed in solving the economic crises, they dont know what to do at all.I think there should be a public inquiry like Iraq war. Falling labor is unable to give a strategy, instaed they have increased indirect taxes to give a last blow on snmall business
Comment by Venk Shenoi on February 8, 2010 at 2:44 pm
A nation of shopkeepers or in modern parlance – small business-men and women.
All the great innovators and entrepreneurs started as small time tradesmen or businessmen or individuals and we will do our country a disservice if interfere with the enterprice-germ.
You might kill of the next Carnegie or Steve Jobs.
Comment by John B on March 24, 2010 at 11:45 pm
Why the focus on small business, surely the focus needs to be on micro-businesses? These businesses are essentially one-man band start ups established either by idea or because the individual has no other source of revenue, essentially the self-employed.
That being the case why not give these people a rebate of 50% on all VAT paid for raw materials to be paid quarterly – this would help provide much needed cash help seeing as the banks have locked down the taxpayers “investment” by way of bonuses and balance sheet strengthening.