Plan to change empty property business rates under fire

Plans to change the way business rates are calculated on empty properties could leave small businesses seriously out of pocket, claims a trade organisation.

The Federation of Small Businesses (FSB) warned government plans to cut the threshold at which firms have to pay business rates on their empty properties from £18,000 to £2,600 will place a "very significant burden" on companies already suffering in the current economic climate.

Additionally, the government is not planning to reintroduce the 50 per cent rate relief.

The FSB says this will result in "struggling business owners who have had to vacate a property and cannot rent or sell it will have to pay more in rates than if they were running a company from the property".

The FSB said it had written to Bob Neill, the local government - and pubs - minister, to express its concerns this move could put small firms out of business.

"If the threshold is going to be cut then the FSB calls for a return to the pre-April 2008 situation of granting 50 per cent relief or at the very least, allow a business to claim Small Business Rate Relief on their empty property," it said in a statement.

Roger Culcheth, the FSB's local government policy chairman, said: "The government has said that small businesses have a vital role in driving economic growth and getting the recovery on a firm footing, yet for some businesses this additional tax could tip the balance and force them into insolvency.

"The result of this cut in the threshold without restoring the 50 per cent relief will make small business owners worse off than they were prior to the 2009 change and significantly more so then they were in 2009 and 2010.

"We urge the government to look closely at this matter and, at the very least, allow the business to claim Small Business Rate Relief."