UK firms ask for simpler approach to business rates

Business rates are a tax on business properties set by the Government; they are collected by local authorities and are the way that those who occupy non-domestic property contribute towards the cost of local services.

Neil Davies, CEO, Close Brothers Asset Finance, commented: “According to the latest advice, business rates are worked out based on a property’s ‘rateable value’, which is its open market rental value, which is in turn based on an estimate by the Valuation Office Agency. Rates can be estimated by multiplying the rateable value by the correct ‘multiplier’; an amount set by central government.

“Our study has found that it’s a nuanced picture out there, and what I mean by that is that the call for clarity is not driven by cost concerns. 51% of those polled feel that the rates they pay are ‘just right’ against 32% who feel they are ‘too expensive’, which is consistent across regions, industries and business size. In addition, more businesses (44%) feel they are getting value for money compared to those who feel they are not (39%).”

There is a strong sense that not enough is being done to assist businesses with rate relief, which is handled differently in England, Scotland, Wales and Northern Ireland.

“Steps are being taken, as demonstrated by an initiative that’s been in place from 1^st April 2017 that saw 100% relief, doubled from the usual rate of 50%, for properties with a rateable value of £12,000 or less,” added Mr Davies. “That said, the message from SMEs is clear that more needs to done.”

Rates have been rising steadily in most regions over the past two years with nearly one in 10 saying they’ve risen ‘steeply’. Yorkshire, London, South West and Scotland experienced above the UK average rises while only 2% of SMEs have seen a decline, with the West Midlands at 7% the only region above the national sentiment.

Close Brothers www.closebrothers.com