News

March 08, 2013

Small firms groups call for action on business rates

Both the Forum of Private Business (FPB) and the Federation of Small Businesses (FSB) are calling on George Osborne to take action on rising business rates in the Budget on 20 March.

The FPB has urged the chancellor to scrap a planned rise in business rates. Its research has identified rates as the most unpopular business tax, with 94% of firms saying that they have spiralled too high.

And the FSB says Small Business Rates Relief should also be made permanent in England as some small firms pay more in business rates than they do in rent.

Both business bodies say the way business rates are calculated must change. The FPB blames the link with inflation and has asked the chancellor to consider capping subsequent rises for the following two years at 2%.

Alex Jackman, FPB head of policy, said: "Business rates are one of the major costs faced by British businesses. RPI has been running at an extremely high rate and as a consequence businesses were faced with a 4.6% increase in 2011, a 5.6% increase in 2012 – the highest for 20 years – and now a proposed 2.6% increase this April. By scrapping business rate rises this April and capping them at 2% over the following two years, the government can help with both cash flow and certainty for financial planning."

In addition, the FPB is calling on the George Osborne to implement tax breaks to encourage more new forms of lending such as crowdfunding. Alex Jackman said: "The chancellor has some tough decisions to make in his next Budget. But we think he must seriously look at new and creative ways to get lending moving again, if not from the banks then from new sources."

The Federation of Small Businesses (FSB) is calling for a "budget for small firms". John Walker, FSB national chairman, said: "What we need to hear on 20 March is not more small-scale policies which tinker at the edges, but measures that will have a tangible effect both immediately and in the long-term. That is why we have asked for a review of enterprise policy, to ensure the right initiatives are in place that really do help small firms start up and grow."