As the Federation of Small Businesses (FSB) launches a new campaign to protect small high street shops, one cafe owner reveals how a business rates hike has threatened the survival of their business.
Business rates reform is the key pillar of the recommendations put forward by the FSB to save England’s high street entrepreneurs.
Read the full recommendations
With FSB research revealing a 93% drop in revaluation appeals through the Check, Challenge, Appeal (CCA) system – which was criticised back in 2017 – the organisation has urged government to make it easier for owners to check whether to appeal a bill, and to lodge the appeal with a “disproportionately high evidence bar”.
• £845m rise in bills between 2017 and 2018
• One owner a week facing prison over unpaid bills
• Two pubs demolished or converted each day of previous regime
• Six shop closures each day of previous regime
The FSB claimed challenging a business rates bill is an “increasingly difficult” task, with red tape, unclear online portals and fines for mistakes putting owners off the process altogether. It warned small business owners were unlikely to have the expertise to attempt CCA.
According to ratings experts, business owners in England could see business rates increase by almost £759m. Meanwhile, around 222 business owners were visited by bailiffs every day in the last 12 months, as local authorities chased unpaid business rates bills.
One FSB member, a coffee shop owner in Peterborough, detailed their experiences of the business system and the costs of transitional charges.
“My business faces serious financial difficulty after the local council failed to inform me that a transitional charge would be added to my business rates bill. This is despite calling them ahead of signing my lease to confirm the billing amount.
“I had budgeted for a monthly amount of £1,500, but the bill was actually for £3,333 a month for the first four months and is now £2,500 a month.
“The charge is double what the council first told me to expect and is putting the business under immense financial pressure and very possible risk of closure.
“I was expecting to have paid around £12,750 in business rates by the end of July but have actually been charged £24,322 – a huge cost to a new startup business that I simply cannot afford.
“Business rates are difficult to work out without hiring expensive agents and lawyers. I had hoped that by contacting the council they would be able to help, but it feels like they don’t understand it either.”
Read more about business rates:
- The business rates loopholes your small company should know
- The business rates appeal process – Paying over the odds for your premises?
- One founder a week faces 90-day prison sentence for unpaid business rates
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