Companies under pressure as business rates set to rise again
The September Consumer Prices Index (CPI) measure of inflation is used to determine how much the compulsory charge will be set at and comes into effect from April 2020.
If the current rate of 2.1% remains the same then this is how much the figure will rise by.
Over 50 major UK businesses including Marks & Spencer, Asda and Sainsbury’s recently wrote to Chancellor Sajid Javid urging him to make fundamental changes to the charge which was first introduced in 1990. They feel it is too onerous and severely limits competitiveness and profitability.
There is also growing support for an online sales tax to be levied so there would be some parity between digital and physical retailers.
A recent announcement from the Government underlined the problems facing traditional High Street businesses.
The Future High Streets Fund is being increased form £675m to £1bn and is set to expand to cover 50 more towns to help them regenerate and improve transport links, access, infrastructure and converting empty retail units into new workplaces and homes.
John Webber of Colliers International property agency said: “We believe it won’t get to the heart of the problem and in itself is not enough to counter the impact of the 2017 business rates revaluation and introduction of downward phasing.
“All very good, but it just simply won’t go far enough and certainly won’t help retailers struggling with their current rate bills”.
He also added that there was no coherent strategy on how it should be spent, how businesses can bid or claim for support nor any details on using the money to tackle the business rates “crisis”.
He concluded: “I hate to say it but without additional measures retailers in many of these towns will stay under threat, stores will be closed and jobs lost, despite all the fancy and well-meaning government plans.”
The additional measures Webber was referring to transitional phasing or business rates relief. This refers to any annual changes to a bill being phased in gradually rather than imposed immediately.
A hike in business rates could be just one of the factors that could spell trouble for an otherwise well-run, sound company.
Get in touch with us to arrange a free initial consultation. One of our expert team of advisors will go through the issues facing your business line by line with you to identify where you can take action now to turn your business around or steer it to safe harbour until you can.