It’s been a long time coming but finally the government are beginning to listen up to the concerns voiced by small to medium sized enterprises (SMEs) in regards to business rates. The out-dated, unfair and rather ridiculous business rates system has caused a number of problems for businesses big and small, including the clients we represent and assist with our long list of accounting services. A recent survey by Close Brothers Asset Finance however has revealed the true scale of the issue.
The study found that some two-thirds (71% to be precise) of SMEs would like the business rates system to be simplified to quash some of the issues being faced by start-up companies and established market leaders. The research also found that almost half of the SMEs surveyed thought the government wasn’t doing enough to assist UK companies with business rate problems, including the provision of business rates relief. Here at Hurren & Co, we aim to make it easier for businesses and sole traders to successfully manage their finances. Whilst our range of accounting services help our clients save time and money, it is up to the government to finally sort their business rates system out for good.
In this blog post, we take a look at the problem with business rates and what could be done to provide relief for struggling SMEs.
The problem with business rates
Business rates have been a prickly issue for business owners and managers for as long as we can remember. With many regions facing over taxing, these rates have made it impossible for some companies to do business with high rates and rents putting a major drain on already tight budgets.
The government made several commitments back in 2016 to combat the unfairness and expense of business rates. As well as plans being approved to allow councils to retain 100% of business rate proceeds (rather than 50%) by April 2020, the government pledged to reduce the burden of business rates by £6.7 billion over a period of five years. Two years on however, businesses are facing the same longstanding issues.
What businesses want
A call for clarity is what is most prominent from the findings of the latest research and the picture painted by SMEs experiencing troublesome business rates first-hand. Chancellor of the Exchequer Philip Hammond has responded to some campaigns that call for the reform of rates. The latest outcry from the business world has resulted in the business rates revaluation being brought forward by one year, from 2022 to 2021, which is a small win for SMEs across the country.
Need help with your business rates? Let our accounting specialists advise you on the latest legislation by getting in touch with us today.