Treasury hits back at 'scaremongering' on business rates

Treasury hits back at 'scaremongering' on business rates

The Treasury has hit back at so-called "scaremongering" reports, reassuring businesses that the vast majority will see no change to their business rate bills in April. 

In wake of the business rates revaluation, author Jeanette Winterson said she feared a "species wipe out" of small independent shops in London, saying the overhaul had pushed her bill up from £21,500 a year to £54,000. Waterstones' m.d. James Daunt estimated his chain would see an increase of £2m per year at the end of last year and called the hike “short- sighted” and “unjust”, while Blackwell's c.e.o David Prescott has also said it will negatively affected by the rate change in locations like Oxford.

Although one in four businesses will see rates rise, David Gauke, the chief secretary to the Treasury, stressed three quarters of business would see "no change, or even a fall" in business rates bills, emphasising the introduction of "generous reliefs" that will mean 600,000 small businesses won't have to pay business rates bills again. 

Last March, then chancellor George Osborne announced a reform raising the rateable value threshold from £6,000 to £12,000, meaning around 40% of indie bookshops would pay no business rates at all in the 2017-18 financial year. London will also see £1bn of support​ from a transitional relief scheme.

"Far from the picture painted by scaremongering ratings agents, nearly three quarters of businesses will actually see no change, or even a fall, in their business rates bills. The fact is that the generous reliefs we are introducing mean that 600,000 small businesses are paying no business rates at all – something we’re making permanent so they never pay these bills again. Whether on a town’s high street or in a rural community, we’ve also introduced £3.6bn in support for companies affected by the business rates revaluation – a process that is making the system accurate and fair for everyone," he said, as reported by the Guardian.

The business rates changes, based on new estimates of rental value of property in Britain, is the first such revaluation in seven years; they are supposed to happen every five years but for a two-year delay.