‘Chancellor must take action to save SMEs’, says MD
Posted on 13/03/2017
The next business rates revaluation comes into effect on April 1st – the first for seven years – and is set to have a huge impact on small and medium-sized businesses across the UK.
Business rates are calculated based on rental values in the areas that a firm operates in and the rises will hit companies hardest in areas where property prices have gone up the most, such as London and the south east.
Michele Wietscher, Director at Newview Windows & Conservatories, comments: “SMEs are the backbone of the economy but the upcoming business rates rises can only have an adverse impact. Businesses will find a way to survive them but it could mean saving money elsewhere.”
Michele continues: “The construction industry is the third largest contributor to the UK economy but the many SMEs in this sector who are renting their units will now have an extra burden to cope with. Combine this with other mandatory costs such as auto-enrolment and the National Living Wage and it’s a cocktail of indirect and direct tax rises hitting small and medium-sized businesses.”
It is not just construction companies who will be hit hard by the rise in business rates; it’s expected a third of independent high-street shops could be killed off by the move, damaging local economies in the process.
Michele is calling on Chancellor Philip Hammond to make business rates a priority in March’s budget to save local economies and the businesses that drive them.
She comments: “Most business rates are paid by much larger corporations so extending business rates reliefs to SMEs with properties up to a value of £50,000 would have little impact on the overall take from tax.
“Also, rather than calculating rateable values every five years, which leads to sudden, massive hikes in rates, it should be done on an annual self-assessment basis, so that the tax can better reflect the ebbs and flows of economic activity.
“Another solution is to scrap business rates completely and replace it with a low, flat percentage charge, which would go a long way towards reducing the burden on SMEs.”