Benjamin Franklin once said there are only two certainties in life: death and taxes.
Well, if he’d been alive today and running a small business, he might have wanted to add a third to that list – increased business rates. No matter how poorly the economy might be performing, or how much your profit margins might be being squeezed, business rates seem to increase inexorably. Business rates are an issue that understandably gets SMEs hot under the collar, and, as accountants, we share their concerns.
Well you might take some comfort from the fact that even the property industry itself shares these concerns too.
They also feel that the current system of business rates is unfair and does not adequately reflect market conditions. So much so that they are calling for an overhaul of the business rates system, and are asking the government to exempt one million small firms from business rates altogether.
The British Property Federation intends to publish its proposals in the coming weeks, and will call for a change to the current process in which annual business rates are reviewed every five years. They want a more transparent and even-handed system to be put in place so that business rates for SMEs are dealt with in the same manner as business rates for larger companies; that is reviewed once a year. If these wide-sweeping changes are introduced the British Property Foundation believes small businesses and retailers could benefit significantly.
So why is the BPF so concerned about the current situation?
Well, the BPF estimates that by the time of next year’s general election, business rates will have increased by around 25% since 2010. Yet during the same period many small business suffered because of the recession and many went under. The Federation thinks this rise is unacceptable and excessive. Its concerns are also shared by High Street ‘Tsar’, Mary Portas. She, too, has called on government to take action to limit the size of future business rate rises and has supported the exemption for a number of smaller firms from business rates altogether.
Speaking about the proposals, the BPF’s Chief Executive, Liz Peace, said:
‘It is crucial that business rates are allowed to rise and fall in line with economic conditions. More frequent revaluations would make the system fairer and more responsive.’
‘Removing small businesses from rates entirely would free up time and resources to allow annual revaluations, and would support small and medium-sized enterprises and entrepreneurs’.
‘If rates continue to rise unchecked this will have big implications for the future and will have a big impact on how our towns and cities will look in ten or 20 years’ time. The rates in many towns and cities are now excessive and in many cases more than the rent. In some cases this can make it impossible to invest in redevelopment and construction, particularly in struggling areas outside London.’ Miss Peace added.
There can be no doubt that despite the economic upturn, many SMEs are still struggling to keep their heads above water. Our job, as accountants, is to help small businesses survive and prosper. That why we offer an accounting service specifically tailored for small business needs, where we offer expert help and advice on business planning, raising funding and identifying the most-suitable sources of finance.
If you’d like help with any of these issues then why not speak to Steven Glicher’s accountants?
For further information call Steven Glicher on 0161 405 8007 or email info@.