Call on Government to rethink after 124 premises in borough may see hike
Wandsworth Council has called on the Government to rethink its 2017 business rates revaluation plan after town hall research showed that 124 local business premises could see rateable values increase by 100 per cent or more from April this year.
Councillors stress that final bills will not increase at the same rate because charges will be capped by Transitional Relief, and many businesses will also qualify for other relief schemes. Most traders don’t know what their actual liability is and won’t until March when the bills are sent out.
Business rate levels are set by central Government, not local councils. Wandsworth argues that the revaluation process is opaque and is creating uncertainty for Wandsworth’s business community. This could undermine confidence and inhibit investment decisions.
The authority is calling on the Chancellor Phillip Hammond to strengthen and clarify the Transitional Relief scheme to ensure vulnerable firms have protection and a clear picture of how their bills will change from April this year. Councillors argue that longer term the system needs to be overhauled.
The council’s study presents a mixed picture across the borough, with 62 per cent of local firms set for a rateable value rise of more than 10%, 6 per cent seeing values go down by more than 10% and the remaining 32 per cent seeing a change of between -10% and 10%.
Although many final bills cannot be calculated at this stage, the council can confirm that over half of the borough’s smaller business premises will either pay zero rates from April or benefit from a reduction. This is due in the main to a change in the Government’s Small Business Rate Relief scheme, which will see qualifying smaller businesses receive 100 per cent relief in most circumstances if their rateable value in 2017/18 is below £12,000, with a sliding scale of relief then being given to businesses with rateable values up to £15,000.
Prior to this change, the 100 per cent relief threshold was £6,000, with the sliding scale extending up to £12,000.
The town hall research suggests pubs and restaurants could be among the hardest hit by the Government’s revaluation, with rateable values rising sharply for some venues.
Wandsworth Council is the first authority in the country to protect its vulnerable pub industry from development and councillors fear this revaluation could undermine the town hall’s efforts. They argue that pubs play a vital role in sustaining the local economies around them and their loss would have knock-on impacts for surrounding businesses.
Kim Caddy, business spokesperson for Wandsworth Council, said: “There is uncertainty hanging over our business community and we fear that this revaluation will result in unaffordable tax rises for many local traders. Restaurants, pubs and bars could be among the worst affected and these businesses often give local areas their character and footfall. If we lose them the wider local economy will suffer and this is a serious threat to the health and viability of our town centres and shopping parades.
“We are calling on the Chancellor to clarify and strengthen the transitional arrangement for the 2017 re-valuation and to ensure protection is given to those firms facing unmanageable increases. This situation can be fixed but it must be done quickly.
“We do very much welcome the changes to Small Business Rates Relief which will now apply to many more local firms. We have a thriving small business economy so this expansion is of particular benefit to our borough.
“Longer term the Government needs to overhaul the rates system which has effectively become a tax on success and removes money from successful parts of London. Places which improve and regenerate are being rewarded with much higher bills. That is not right.
“Because revenue is pooled and distributed at a national level it means places like Wandsworth which work hard to achieve sustainable commercial success end up subsidising other parts of the country.
“The tax system should create an incentive to build a strong and prosperous local economy and we urge the Chancellor to construct a new system with this principle at its heart.”
Individual businesses can check their new rateable values and get an estimate of their new bill at www.gov.uk/correct-your-business-rates
If businesses wish to appeal they can do so from 1 April 2017 by contacting the Valuation Office Agency on 03000 501501 or online Should they appeal, business are recommended to keep up to date with their payments until their case is concluded.
February 24, 2017