Government acts on rates burden

By John Harrington

- Last updated on GMT

Related tags Business rates Small business Government

Darling: plans to ease cash flow
Darling: plans to ease cash flow
The Government has agreed to reduce increases in business rates and help licensees hit by the scrapping of transitional rate relief. The 5% increase...

The Government has agreed to reduce increases in business rates and help licensees hit by the scrapping of transitional rate relief.

The 5% increase for this financial year has been cut to 2%. Licensees will be able to defer payment of 60% of the increase of their rates bill for 2009/2010 until 2010/2011 and 2011/2012.

It comes as licensees complain to the MA about huge hikes in business rates of up to 550% with the scrapping of transitional relief.

Local authorities are set to write to businesses once the regulations are in place, which is expected to be at the end of July. Half of the deferred amount could be paid in 2010/2011 and the other half in the following year.

Announcing the decision to cut the increase in business rates, Darling told Parliament: "I am very conscious of the fact that businesses in this country were faced with an increase to business rates of 5% simply because the increase in business rates is linked to the rate of RPI inflation last autumn.

"But RPI inflation has now fallen to 0% in the last month and it is expected that it will fall further than that. So I want to bring forward a measure that will help businesses."

Jeremy Hill, director at Christie + Co, said: "We welcome this last-minute move by the government to back down on what could have been a crippling increase in business rates for small businesses during what is already a very challenging climate. However, due to the last-minute nature of this decision, many small businesses will be left with more red tape in order to agree revised payment plans with their local councils."

Related topics Legislation

Property of the week

Follow us

Pub Trade Guides

View more