Pressure mounts over business rate hike

PRESSURE is mounting over government reforms which threaten to drive up rural business rates.

The first revaluation of business rates by the government in seven years will see many businesses pay more due to increases in property values.

The government argues that overall the fiscal impact of the revaluation will be neutral – saying those with a rateable value of less than £12,000 will be exempt from the tax from April.

As a result, the government says 600,000 businesses will pay no business rates at all.

    See also: Rate reform 'could destroy rural businesses'

But an increasing number of people fear that rural areas will be among those most affected by the changes, with some businesses facing steep rises.

The Rural Services Network has warned that rural businesses and local authorities must not be unfairly penalised by any changes.

Now the Country Land and Business Association has called on government ministers to avert what it has described as an impending business rates crisis.

CLA president Ross Murray said: "Rural businesses are suffering because of a clumsy and unfair rates system.

"From this April, thousands of businesses will see dramatic increases in their rates bill, a problem exacerbated by the political decision to delay revaluation by two years.

Widespread concerns have been aired across business and industry since the announcement of the rate hikes affecting some 500,000 businesses nationally.

Like other organisations, the CLA wants government action to reduce the burden on businesses, arguing that a dramatic change in costs could threaten their viability.

Businesses that were exempt under the 2016 Small Business Rate Relief should remain exempt under the 2017 scheme even if their new value has taken them over the threshold, it says.

Rural businesses among those worst affected are expected to include equine businesses, livestock markets, self catering accommodation, golf courses and events locations.

Other businesses could also be hit where a rates rise is a result of a "scheme" valuation rather than where the Valuation Office Agency has undertaken an individual valuation.

The Livestock Auctioneers Association said it was vital that affordability and running costs were considered when business rates were calculated.

Livestock auction marts face an average increase of 86% in rateable values, it warned.

The increase is being proposed despite little or no change in recent years to auction mart margins, said John Hall, a surveyor and senior partner at Warwickshire-based Howkins & Harrison.

"Turnover has increased, but equally costs have risen and therefore there has been little or no change to margins," said Mr Hall, who is an auctioneer at Rugby mart.

Auctioneer association secretary Chris Dodds said some larger markets were facing rises of up to 300%, which threatened the sustainability of the industry.

"Markets are the heart of the rural economy, and have an important social responsibility beyond the auction ring," he warned.

"Nobody appears to be considering the affordability of these rate rises.

"Undoubtedly some markets will close and the important service they provide, not only to farm businesses but also to communities and jobs, will be lost."


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