“Perhaps it is no surprise to see the Dickensian spectre of Scrooge appearing in the form of the Chancellor tomorrow but it is a significant disappointment that so little is on offer to business with the reduced increase in business rates from 3.2% to 2% for next year,” comments Keith Cooney, head of Knight Frank business rates. “This means that rates will now increase by £ 600 million to a record high of £ 26.25 billion.
The reason that rates were set to increase is because they are linked to the Retail Price Index. However, in the 2010 Budget the Chancellor decided this was no longer appropriate to use for many of the taxes including benefits, tax credits and pensions. These are all now based on the much lower Consumer Price Index which has fallen to 2.1% for October. We would call upon the Chancellor to link with the CPI for future years.
We welcome the continuation of the Small Business Rate Relief (SBRR) which means that any business with a rateable value below £6,000 will be exempt from rates. This relief will then taper off to zero once the rateable value reaches £ 12,000.
However, none of the above addresses the calamitous decision to postpone the rating revaluation and means that business are still been charged a tax which is based on the boom period of April 2008. The rationale behind this decision remains highly ambiguous but it is clear that it has damaged the prospect of a recovery in the regional high streets. “
