UK business rates 2017 damage small businesses ahead of Brexit, where other firms like Amazon might benefit from the change. What Philip Hammond has to say?
20 February, AtoZForex – The Prime Minister of the UK, Theresa May, is now facing a Government split in regards to the business rates changes. Ms. May appeared in such situation after Philip Hammond has cautioned the UK citizens that significant rises might “whack” the confidence of small firms in the current time.
UK business rates 2017 hit small businesses
Reportedly, a source from government stated that the Chancellor need to “lessen the pressure” on small firms in the UK. The source highlighted that the small businesses are facing big increases ahead of Brexit due to the increases in business rates. Where senior Conservatives stated that the UK Treasury acknowledges concerns about the small firms, the Treasury is also ready to act in order to prevent "cliff edge increase".
Moreover, conservative MPs in the South East are expected to push Mr. Hammond to act at the pre-budget meeting in Parliament. Reportedly, the source from Government has added:
"All the economic indicators are going in the right way. The last thing you want to do is whack the confidence of small businesses, he's got to do something that lessens the pressure on."
The ministers in the UK are being pushed to revise “penal and unfair” rises in business rates. The new business rates will come into effect in April will appear as the first change in almost a decade. The rates will see firms paying interest rates which have been calculated to take into consideration the rise in property prices since 2008. This implies that many businesses in the South East of the UK will face huge increase, while others where the rental prices have decreased, will take advantage.
Earlier last week, the vice-chairman of the Conservative Party, Mark Field, stated that Mr. Hammond should back down from the "looming nightmare" of increases in business rates. Mr. Field is one of more than 20 Tory MPs, whose electorates are facing a substantial rise in business rates.
As per the plans of the UK state, the business rates will grow by up to 42 percent next year. The previous cap stood at 12.5 percent, where Tory MPs are suggesting lowering it in order to help businesses to adjust. However, the Government has insisted that “no u-turn" is possible in this situation. Moreover, it stated that ministers accused the rating agency of providing the public with the wrong information about business rates.
Reportedly, the source familiar with Treasury dealings has stated there is growing recognition about the issue from the Government side. The source has added:
"They will give some ground on this, there is recognition that this is a big issue and it is causing concern in the Tory heartlands. It needs to be a tweak, not a u-turn. Privately ministers are recognizing the concerns of MPs."
Hammond's constituency facing hard times
Philip Hammond is facing an uprising from businesses in his own constituency. His constituency is seeing some of the highest rate rises across the UK. As per the official outlook, the business rates bill in Runnymede in Surrey will grow 24.7 percent in 2018.
The chief executive of the Surrey Chamber of Commerce, Louise Punter has stated:
"Surrey is a very expensive place to run a business because property values are very high. It is very difficult. You have to pay business rates before you've sold a single product of service. It is very debilitating if you've got that big bill. It's one of the biggest, most expensive costs we have.”
Mr. Punter has added that there are businesses that are badly affected in Mr. Hammond’s constituency.
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