East Anglia: Government blasted over inflated tax bills for small business

BOSSES of small businesses in East Anglia have hit out at Government plans which it is claimed could see firms paying inflated tax bills.

Earlier this week ministers passed legislation to delay a revision of levels at which business rates are set.

The current rates relate to property rents from 2008. But since then many rents have gone down, leading some businesses to believe their tax bill would be lowered if a revision was undertaken.

A spokesman from East Anglia’s Federation of Small Businesses said: “We all know that the present rating system is out of date and does not relate to the state of the economy and is in serious need of an overhaul.

“The decision by Government to [postpone] is just another blow to already struggling retailers. The decision will only undermine the confidence in small businesses.


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“If the Government is serious about [firms helping to grow] the economy, it needs to be making decisions to help, not hinder them.”

But speaking in the House of Commons, communities secretary Eric Pickles argued that delaying the revision until 2017 would be in the interests of business.

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He admitted that if a revision were carried out now, official estimates show it would result in around 300,000 firms paying lower rates.

But he went on to point out that a further 800,000 would end up paying higher rates; meanwhile ministers would have to pay �43million for the revaluation.

Mr Pickles said: “An unpredictable business rates valuation could be costly to British firms so this bill reschedules the revaluation to 2017.

“This will give businesses five years of tax stability and certainty, leaving businesses working to grow and improve the economy.”

The cabinet minister said it was a “misconception” that because a firm’s rent had fallen, their rates would fall too.

With the majority of firms facing an increase under a revaluation, he also argued the process would cause unnecessary uncertainty at a time of financial difficulty.

He said: “There is a significant risk of the revaluation going very wrong and harming growth. Small and medium-sized firms will be the hardest hit if we don’t take action.”

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