1. That rate relief (and the application of the £50 increase cap) is dispersed now by local Councils to relevant businesses regardless of the long / short-term strategy
2. That revaluation relief be extended until central government have redesigned this system of taxation
3. That the business tax is linked to a more meaningful metric e.g. profit/turnover in line with the collection of other UK taxes to create a fairer system (rental prices are no longer a fair way to calculate this tax due to reduced footfall and online business sales)
4. Rates Valuations are equitable for businesses trading within a similar set of criteria
What Can You Do?
If you are a business owner:
- Complete our survey: https://www.surveymonkey.co.uk/r/bizratesrevaluation
- Sign Our Open Letter to Phillip Hammond MP and Greg Clark MP (Link Coming soon)
If you value your local independent shops:
- Sign Our Petition! (Link Coming soon)
- Let us know why you love your local independent shops
What’s The Problem?
Business rates are a tax paid by businesses calculated based on the rental value of the property that the business trades from. Before property prices in London became hugely inflated and before the introduction of online retail, this was a fair method of calculating a business tax.
The revaluation of business rates that took place in April 2017, is based on the value of a property in 2015. The previous valuation was based on prices in 2008, and since then there has been a substantial increase in property value, especially in London. Therefore local independent businesses have been hit by hugely increased business rates bills.
Since many businesses do not own the property that they trade from, and footfall has been dramatically affected by online shopping, this way of calculating a tax for businesses is no longer fit for purpose.
What is the Impact of the Revaluation?
The revaluation has hit small, independent shops very hard. Many businesses have undergone rent reviews through this period of time and so have experienced a double whammy of outgoings.
Below are first-hand experiences of business-owners and traders in Southwark:
Putting businesses at risk of forced closure or defaulting on their covenant
“Once the full charge kicks in without relief, our overheads will become untenable.”
“I have some Transitional Relief this year but no indication of whether I will get it again next year. If I don’t, I will need to find an extra £4,756 from somewhere! This alone would put me out of business. I also have a Dulwich Estate rent review in about 2 years. Both will put me out of business for sure.”
Having to reduce capital investment
“My immediate concern is the pressure that this adds to small businesses that already have a lot of competition from other similar businesses and the on-line shops”
Cutting staff positions
“Rising rents, weakened pound, increasing Living Wage, auto enrolment pensions and now increased rates, potential of import duties – it is getting harder and harder to make retail work – unless of course we close our stores, decamp to an industrial estate, cut staff and operate online only.”
Reducing / removing services
“Many of our services are non-profit e.g. home delivery, free medical advice, some are low profit e.g. Health Check BP check, Emergency Contraception and will have to be reduced or cut completely”
“With the drastic increases in business rates, the potential of staying in this area is becoming unsustainable. We are experiencing limitations to develop / invest in the business due to highly increased rates, and therefore affecting the resources which we offer to the community.”
Other concerns include:
“that such a large rise on high street small businesses will eventually mean again that only big chains can afford to be represented locally.”
- The variance in rates calculated for shops of the same size, same landlord, same borough
- The variance in rates calculated for shops of a similar size, but in different boroughs
- The substantial increase in taxes without a substantial increase in revenue to meet these costs
- If local businesses close as a result of rising rents and taxes, the result will be job losses for local people. This will also provoke a genuine reduction of independent shops and inevitably, a change in atmosphere and feel of our local areas. Soon only big chains will be able to afford to be represented locally.
- The increasing rates and lack of clarity around Transitional Rate Relief both the central government policy on this and the additional system now in consultation from Southwark Council, makes it impossible to forward plan
- The inequity of the whole system is a problem
- Business rates mean that businesses are unable to increase staff wages, need to increase prices, are unable to invest in the business fixtures and fittings, had to complicate the business by taking up wholesale supply
- The impact of the flooding, due to burst Thames Water pipes, is still being felt in Herne Hill with many premises still unable to use parts of their shops. Ensuring that the valuations office has taken this into account has been time consuming for businesses.
What’s The Situation Now?
We are in a period of 6 weeks now when Southwark Council are applying Southwark Local Business Rate Relief. Anyone entitled to this should receive a revised bill automatically. For full details of this provision please see the Southwark Council Cabinet Paper of the 19th September 2017
We are awaiting the impact of this scheme for our local businesses and will continue to campaign to change the way that business rates are calculated.
How are we doing this?
One route is via Helen Hayes, our local MP.
Prior to the General Election, Helen wrote to the Parliamentary Under Secretary of State (Minister for Local Government), Marcus Jones MP on behalf of the 3,500 small and medium sized businesses in Dulwich and West Norwood. In her letter she outlined the concerns raised, and asked the Government to review the impact of the proposed changes and to ensure that small businesses are protected from unsustainable increases in cost as a consequence of the revaluation.
Helen Hayes is also a co-signatory of an open letter produced by London Councils, calling on the Government to protect businesses in London against the impacts of the revaluation.
Councils are responsible for the implementation of discretionary rate relief, which is funded by the government, and Helen Hayes has also written to Southwark Council to ask them to clarify whether all local businesses will be eligible for the £50 cap in line with the Government’s pledge that any business coming out of small business rates relief as a result of the revaluation would be no more than £50 a month worse off.
Helen is also pressing hard for a fairer system for business rates through her work on the Communities and Local Government Select Committee.
Another route is by sharing the impact of business rates on our communities with the All Party Parliamentary Group for Town (and City) Centres. Please help us to make this information as comprehensible as possible, if you are paying business rates, by completing our survey: https://www.surveymonkey.co.uk/r/bizratesrevaluation