Following the announcement of a snap election, the small businesses hit hardest by the recent business rates rise will miss out on a £300m relief package.
We recently revealed the areas most affected by the business rates rise, and it now turns out their promised £300m relief fund package will be delayed due to the general election.
And with business rates not calculated on profit or turnover, some businesses have been left badly hit by rising property prices in their area.
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Relief package will be next government’s responsibility
The affected businesses were hoping that the fund would be available within a matter of weeks. Indeed, the Department for Communities and Local Government has even completed the consultation on how to implement the scheme.
However, with news of a general election in June, it has been confirmed by a spokesman that it would now be down to the next government to publish a response and to put the package into practice, meaning small businesses will be without the funding for months.
Funding delay a ‘grave concern to small businesses’
The revaluation could cause business owners in the areas worst affected to struggle, and Mark Rigby, the chief executive of business rent and rates specialists CVS, said in the Guardian, that it will be a concern.
“The relief fund was negotiated and designed to help those shouldering the biggest increases through the revaluation,” he said. “For the distribution of that relief to now be delayed is an unhappy consequence of the general election and will cause grave concern to small businesses already worried about the burden they are facing.”
Where will be most affected by business rates rise?
Taking a look into our data on small business owners, it emerged that businesses in the areas worst affected also have some of the least cash to spare.
Reading and Milton Keynes will see particular spikes in business rates, despite over a third of all businesses with a premises turning over less than £50,000.
|City||Projected rates rise||Businesses with turnover <£50k||Businesses with turnover >£50k|
It adds weight to the argument that the way business rates are calculated is unfair.
Fiona McSwein, Chief Marketing Officer at Simply Business, said: “In expensive areas, we would expect small businesses to have higher costs of business and higher turnover but the property price rises in some areas are a result of speculation rather than successful business growth.
“With the rise in business rates, the cost of doing business should rise roughly in line with the increase in sales. Instead, the growth in some areas of the country will face a huge setback. To base tax on property value rather than business turnover or profit is unfair.”