The government has announced that it will allow a record 5% rise in business rates
to go ahead on April 1st causing widespread anger among business groups, who claim that many companies will not be able to afford the rise in such difficult economic times.
The 5% increase in the rate will be the biggest since the current system was set-up in 1993. The increase in the rate is based on Retail Price Inflation figures from last September, when prices were very high.
However, since last September the UK economy has officially entered recession and unemployment now stands at over 2m. There are fears that the increase in the rate will cause some small businesses to cease trading.
"Labour is dragging local firms down the road to ruin. It is the height of economic madness to be increasing taxes on local firms in the depth of recession," said Caroline Spelman, shadow communities spokeswoman.
Source: www.newbusiness.co.uk
www.ukba.co.uk
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Chancellor u-turn over planned 5% business rates hike
Many small businesses will be relieved to hear that the Alistair Darling has reconsidered his plans to implement a 5% business rates rise from 1st April.
The Chancellor appears to have bowed to considerable pressure from business groups over the proposed hike, stating that the proposed rate rise will in fact be limited to 2%, with the remaining 3% to be applied over the following 2 years.
"Real and genuine help"
Darling claims that one and a half million properties would benefit from the £600m deferral in rates, and said that his change of heart was related to the fall in RPI inflation to zero.
"I believe this will provide real and genuine help for businesses in this country," said the Chancellor in an interview with the BBC yesterday.
"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, last September.
"But RPI inflation has now fallen to 0% in the last month and it is expected that it will fall further than that."
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