Rate rises put traders at risk

RECESSION-hit traders are facing “outrageous” rate hikes of up to 25% which could force many out of business, it was warned last night.

Laurence Cawley

RECESSION-hit traders are facing “outrageous” rate hikes of up to 25% which could force many out of business, it was warned last night.

Business leaders in Suffolk have told how small enterprises are being hit especially hard by this year's business rate hike of 5% - which coincides with the end of a four-year transitional rate relief scheme, which had softened the blow of previous increases.

It means some firms will get rate bills way above the basic 5% rise set by Government and this has triggered fears that some traders will struggle to cope with the extra costs.

Suffolk's Federation of Small Business yesterday called on the Government to halt its planned business rate hikes claiming they were set before the onset of the recession which is hitting many traders.

One of the businesses affected is the Hunter Gallery in Hall Street, Long Melford.

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Owner Camilla Rockwell said she was stunned to receive her business rate bill for the coming year, which showed a rise of 24% from �4,837 to �6,012.

“This is outrageous,” she said. “This is just dire. We were not told anything about it or given any warning.

“Rates are my single biggest outgoing. I can't pay it and I am not going to pay it. The whole thing just makes me feel quite sick.

“We are a valued member of the art community and most of our visitors come here to see the art rather than to make a purchase.”

She said she had spoken with other business owners who were equally dismayed by the hike and voiced concerns over the future of some businesses in the area struggling to cope with such large rises in non domestic rates.

Chris Soule, chairman of the Suffolk branch of the Federation of Small Businesses and vice chairman of the East Anglian FSB branch, said: “This was set before the recession and the Government needs to look at and say to itself maybe it needs addressing.

“One thing we are doing is encouraging all business to claim small business rate relief. It reduces rates by a half, but only a half of businesses claim it.

“The 5% increase is just one of many small things that are increasingly causing issues for small businesses.”

A spokesman for the Department for Communities and Local Government said: “Business rates are adjusted each year to take account of inflation in the previous September - this is a consistent approach since the introduction of business rates in 1990.

“Reducing business rates would give untargeted support to all businesses, and would not significantly help individual small businesses - saving less than �60 a year for a property occupied by a business receiving small business rate relief.

“The Government is committed to targeting support for business, which is why the pre-Budget report included a package of measures to provide real help, including the cut in the main rate of VAT (Value Added Tax) to 15%, free business health checks and an aim from Government to pay suppliers within 10 days.

“As the Chancellor has pointed out, the Government keeps all tax policy under review, but there are no plans to amend the business rates system.”

The current transition scheme, which was confirmed in December 2004, will operate over a four year period from 1 April 2005 to 31 March 2009. Every ratepayer will pay their true rates liability in the fifth year (2009/10) and many will pay it well before this.

Business rates are collected by district and borough councils, which do not set the rates and merely pass the money back on to the Government.

A spokesman for Babergh District Council, one of the county's collection authorities, said the reason for the above-inflation rise was due to the Government's 5% increase in non domestic rates and changes to transitional relief.