We spotted a story over in the Mail’s This is Money Small Business section that warns of the potential impact on small shop owners of large tax hikes in some pockets of the country.
Is your small business a shop on the local high street? Have property prices around you been soaring?
‘So-called business rates are a tax levied on firms that operate from a premises’, reads the piece. ‘It is like a council tax on business properties and goes to the local authority to pay for street cleaning, roadworks and other services.’
So, what’s the story?
This tax is reckoned ‘on the size of the buildings and their rental value if they were let out’, it explains, not on your business profits.
There’s been a delay recently in reviewing these – it’s been seven years instead of the usual five – and in that time ‘a property boom has pushed prices up by 50 per cent in some areas.’
This means some small shop owners may be shocked to find they’re facing massive hikes.
The Mail piece expands on a number of individual cases. It says, while 900,000 small business owners ‘will see cuts to the rates they pay’, and 400,000 will see no change, ‘half-a-million small business owners will have to pay more’.
These are largely in London, and ‘desirable towns and villages across the country’.
You can check, the piece says, with your local council. ‘A government department called the Valuation Office Agency (VOA) calculates increases for every business’, it explains.
‘However, critics argue that the calculations are shrouded in mystery, making it difficult to appeal against unfair valuations.’
That said, the Mail also records examples of where individuals have complained to the VOA about their proposed new rate, and had it reduced. So it’s clearly worth challenging.
One particular concern that the piece highlights has been for people who may have felt lured into a false sense of security by last year’s Budget – when ‘the then Chancellor George Osborne announced that businesses with a rateable value of up to £12,000 would be exempt from the levy and those with a value of between £12,000 and £15,000 would pay reduced rates.’
Some felt encouraged by this.
‘Mr Osborne described the tax as a ‘fixed cost that weighs down on many small enterprises’ and added that 600,000 small businesses would be spared a bill entirely.’
‘But some firms are learning that premises that used to be valued at less than £12,000 are now valued much more highly.’
Again, the Mail has interviewed a couple.
Are you affected by any of this? Read the full piece over in the Mail This is Money. It gives a lot more detail.