SMEs in Norwich are concerned about the financial impact of a potential business rate hike. Image courtesy of: brasswatch/sxc.hu
Many small businesses in Norwich are bracing themselves for a significant increase in business rates by the Government; with some SMEs fearing the planned 5.6 percent April increase could signal the end of their business.
Despite the Government’s insistence to implement the business rate hike, there are calls within the eastern region for the Coalition to delay the increase and even cut rates in order to provide stability to flagging businesses.
Norfolk County Council
has engaged with many local businesses regarding this issue, with many fearing the hike would undermine Norwich’s bid to develop a business improvement district which would provide the local authorities with greater control over how business rates are spent to improve the surrounding area.
Roger Pemberton, chairman of Norwich Lanes
, said: “People are seeing upward pressures on their fixed costs and that is a serious concern and it’s something that’s more significant in the current climate.
“We understand that the nation needs to raise more money, so I can understand it from a political perspective, but it’s very poor timing in terms of where we are, businesses are very constrained at the moment.”
Martin Swinley, commercial partner at Bidwells
, believes business rates are seriously concerning smaller businesses, with rates in some cases amounting to as much as 10 percent of overall turnover.
Mr Swinley also revealed an existing levy forcing landlords to pay a 40 percent rate on all empty UK commercial properties had the potential to skew overall market data.
“There are various threads converging which makes business rates a pressure point and it comes at a time when household incomes are being squeezed,” he said.
“If you live in a house worth £250,000 you may pay up to £2,000 a year in council tax, but if you are in a commercial property with that same value, the chances are your rateable value will be £25,000 and your business rates will be £10,000.
“It’s a huge cost, business rates are a central government tax, the rise will see the rate increase to 45.5p in the pound which is a huge rate of tax.”