The Federation of Small Businesses says a decade-long freeze on the relief threshold, coupled with backdated changes hitting shared offices, is “directly undermining” the government’s growth agenda.
More than 100,000 small companies have been pulled into the business rates regime for the first time, prompting the country’s largest small business lobby group to demand an urgent rethink from the Treasury.
The Federation of Small Businesses (FSB) has written to Daniel Tomlinson, exchequer secretary to the Treasury, urging ministers to lift the threshold at which premises become liable for the property tax, and to reverse a separate change in methodology that is leaving start-ups and micro-businesses in shared offices nursing unexpected bills running into thousands of pounds.
By piling further costs on the smallest firms, the FSB warned, the existing regime “directly undermines the government’s own growth ambitions”, a pointed reminder that the chancellor’s pro-growth rhetoric is being tested on the high street as much as in the City.
Business rates are levied on most commercial properties in England and are calculated on a building’s rateable value, an estimate of its open-market annual rent set by the Valuation Office Agency (VOA). Single-site small firms pay nothing if their rateable value sits below £15,000, a threshold that has not budged in ten years.
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