Federation of Small Businesses joins calls for business rates reform

By Michelle Perrett

- Last updated on GMT

Change needed: the FSB is the latest organisation to highlight the issues with the current business rates system (image: Getty/Rob Daly)
Change needed: the FSB is the latest organisation to highlight the issues with the current business rates system (image: Getty/Rob Daly)

Related tags: Business rates, Business rates in england and wales, Finance, Legislation

Small firms should not be penalised with a higher business rates bill for greening their premises or improving staff wellbeing with new amenities, while childcare providers should be granted rates relief, the Federation of Small Businesses (FSB) has said in a letter to Government

The business group has written to the Government to highlight steps that should be taken to protect small businesses, spur economic recovery, and secure green investment as part of its business rates review​. 

It describes the tax as an “indefensible” disincentive to invest in net zero and employee wellbeing measures. 

The FSB is the latest organisation to highlight the issues with the current business rates system. 

Leading trade groups – the British Beer & Pub Association (BBPA), UKHospitality (UKH) and the British Institute of Innkeeping (BII) – have all called for business rates reform. The calls came as they are set to respond to the HM Treasury’s consultation on business rate revaluation​s and proposals to evaluate them every three years. 

Rating experts at Colliers​, the property consultancy, recently said  the Government’s latest proposals on business rates will create more difficulties for pubs appealing their business rates than benefits

Regressive and outdated

In a letter to ministers, FSB national chair Mike Cherry describes the tax as “regressive and outdated”, and encourages policymakers to stop penalising investments aimed at improving sustainability and working conditions for employees, such as solar panels, insulation, ventilation, recycling facilities and bike sheds.  

He has also called for aid aimed at high street recovery by accelerating reforms that have seen some of the smallest businesses removed from the rates system by increasing the threshold for 100% small business rates relief to £25,000.

Cherry also called for the removal of a ‘quirk’ in the system that causes a firm operating across two premises to be charged rates even if its total valuation should see it qualify for relief.  

Light-touch

Ensure that efforts, welcomed by the small business community, to conduct more frequent revaluations for business rates purposes are “light-touch and transparent,” and do not prevent valid appeals.    

“The Government is absolutely right to overhaul a business rates system which often lets online retailers operating from remote warehouses off the hook whilst punishing small businesses that serve as community hubs, “ he said.     

“This is a levy that hurts small firms trying to do the right thing: if you put solar panels on the roof to aid your transition to net zero, or install ventilation to support the wellbeing of your staff, the Valuation Office Agency will advise your local authority that you should be paying more in business rates.” 

Related topics: Legislation

Related news

Show more