Business rates in chaos as higher fees kick in

‘The current uncertainty as to who will qualify, and to what extent, is of huge concern’

HALF a million companies face business rates chaos today as they start paying higher fees without knowing if they can benefit from a new £300 million relief package.

Restaurants, high-street shops and businesses in the South East and London are among those worst affected by the first revaluation in seven years.

Some firms face a rise of around 50 per cent in the business tax and will have just 14 days to pay their first monthly instalment. However, a support fund announced by the Chancellor last month is not yet up and running and businesses do not know if they will be able to benefit.

A consultation on how the scheme will work has not been completed and each council will be free to decide who can be given financial support.

Experts expressed “huge concern” that businesses could be left in uncertainty for months because the scheme may not be fully operational until the summer.

Government sources last night de- fended the fund, saying it was only announced last month and indicating that ministers want it ready by the end of April.

Jerry Schurder, head of business rates at Gerald Eve, said: “Whilst the package of measures announced in the Budget will eventually bring benefit to some businesses, the current uncertainty as to who will qualify, and to what extent, is of huge concern.

“Rates bills landing on doormats now do not include any of the new reliefs and demand payment of the first

monthly instalment within the next few days.”

Mr Schurder continued: “In the meantime, Government is still consulting as to how the £300 million discretionary relief fund will be divvied up amongst councils.

“Only once it has made decisions and advised local authorities as to the categories of business Government believes should be considered for relief will the process begin. Councils will have to devise their own guidance as to which of their local businesses might qualify, programme their billing systems, create application procedures and put in place resources to manage what could well be a torrent of applications for these discretionary reliefs.

“We could be well into the summer before businesses learn what share of the pie, if any, they will be granted.”

Today business rates – a tax that companies pay based on the rentable value of their properties – will change for the first time in seven years. The Treasury says the revaluation is revenue neutral, with parts of the country where houses prices have risen paying higher bills and vice versa.

Some 510,000 businesses will see an increase in their rates, 420,000 will pay the same and 920,000 will see a decrease according to government-released estimates earlier this year.

Those worst affected face their rates doubling or tripling because of soaring house prices.

Philip Hammond, the Chancellor, announced three measures of support last month. Small firms facing the largest rates were offered extra support, while 90 per cent of pubs were given a £1,000 discount. The third measure was a £300 million fund that would be handed out by councils.

A Government source said that in total a £6.7 billion package is in place to help businesses with the revaluation and it is hoped the £300 million fund will be available “as soon as possible”.