Promoting and enhancing best practice and technical expertise

Small firms are hit by rates relief delay

Thousands of small businesses in England who were promised financial help to ease the burden of hikes in business rates are still waiting.

The chancellor announced a package of measures in the March Budget, including a cap for the most vulnerable firms who were facing huge hikes in their bills.

Business rates are a property tax based on rental values.

Changes to the rates came in in April after a revaluation of property values for England and Wales last year.

Although most businesses overall have seen their bills either stay the same or decrease, the government was forced to act following reports that some small companies faced rate rises of up to 3,000%.

'A real impact'

These are the so called "cliff edge" businesses which Philip Hammond promised to help.

He announced that firms losing small business rate relief - a discount given to businesses with properties below a certain rateable value - would not see their bills increase by more than £50 a month.

The government set aside £25m this year to pay for the pledge.

Whitstable florist Jane Antoniades felt a huge wave of relief when she heard her rates bill would not go up by more than £50 a month, having faced a 353% increase over five years.

But nearly three months on since the start of the new tax regime in April, she's still waiting for her bill to be adjusted.

"So far I've had to pay £437.08 per month, instead of just over £200. It's a huge difference.

"We haven't got the capacity to pay this extra money. It's going to have a real impact on our business if we can't claw this money back soon and start paying the right amount," says Jane.

She's not alone.

Image copyrightGETTY IMAGES
Image captionThe delays are causing "panic and confusion", says CVS

According to rates specialist, CVS, 24,986 small businesses have lost all, or part, of their small business rates relief.

Despite Mr Hammond's announcement, the money has yet to flow to most, if not all, of these businesses which are in need of the greatest support.

So why the delay?

For starters, the government's U-turn on rates was announced after the new bills were already printed and just days before they were posted.

Canterbury Council said it was working to update its system to enable new bills to be sent out.

But councils across England have told the BBC that they are awaiting further guidance from the Department for Communities and Local Government (DCLG).

Although local authorities are legally able to go ahead and adjust existing bills, without the necessary published guidance from government they have no guarantee they will receive the money back from Whitehall.

And the general election has held things up.

"A common sense approach here is needed," says Mark Rigby, Chief Executive of CVS.

"The money to help those most in need is coming from the government and there is no reason why revised tax demands shouldn't have been sent out by local councils by now.

"These delays are simply causing panic, confusion and alarm for small firms,"

Councils have been left in limbo and have been pushing the government for guidance.

But within the last few days, the DCLG has reportedly written to local authority chief financial officers in England with the necessary paperwork.

Help is coming

A Local Government Association spokesperson said: "After receiving guidance, councils have now been able to begin working with businesses in their local areas to identify those eligible for this new discretionary relief funding."

A spokesperson for the DCLG also confirmed that help should soon be on the way.

"We have also published guidance on the additional relief available to support small businesses and have encouraged local authorities to inform businesses that are eligible as soon as possible."

That can't come soon enough for Jane and her small flower shop. Like other rate payers, she's got another big bill in the next few days.

"How long are they going to hold on to my money?

"We need this relief now. The rates system is such a problem for the whole High Street, and it's small independent traders who are bearing the brunt.

Source @BBCNews

30 May 2017