Thousands of small businesses hit hardest by the recent changes to business rates in the UK have been dealt a fresh blow after a £300m relief package promised in the budget was waylaid by the general election.
Earlier this year the government came under pressure to take action on business rates after a revaluation of property in Britain hit the owners of shops, restaurants and pubs in parts of the country where property prices had surged. For example, a property boom in the Suffolk coastal town of Southwold forced rateable values up by 152%, with some shop owners saying the hike threatened the viability of their businesses.
It was hoped that the support fund would be up and running within weeks. But although the Department for Communities and Local Government has completed the consultation on how best to implement the scheme, a spokesman confirmed it would now fall to the next government to publish their response, resulting in a potential hiatus of several months.
Mark Rigby, the chief executive of business rent and rates specialists CVS, said the delay was a serious issue for firms struggling with the impact of the revaluation.
“The relief fund was negotiated and designed to help those shouldering the biggest increases through the revaluation,” he said. “For the distribution of that relief to now be delayed is an unhappy consequence of the general election and will cause grave concern to small businesses already worried about the burden they are facing.”
Business properties are usually revalued every five years but this was delayed by two years as a result of the economic downturn. The last revaluation, which came into effect in 2010, was based on property values from 2008 which explains why some firms have seen a sharp rise in their business rates, which are based on the value of commercial property.
According to research by CVS, the average rateable value of shops in England and Wales increased by 8.5% at the start of this month, but the value of shops in Southwold, Blaenavon, Dolwyddelan, Port Isaac, Rhymney, Kenley and Corwen increased by more than 100%.
Rigby urged councils “to show restraint” and refrain from enforcing business rates bills against likely recipients of the relief during the period of delay.
