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Home > News > Small firm...

Small firms hit by £25 billion business rates grab as wages rise

From 1st April, business rates bills and the National Living Wage will increase across the UK. The business rates tax take for England is set to rise by 3.5 per cent in the coming financial year to £24.8 billion. The National Living Wage for over 25s is rising from £7.50 an hour to £7.83.   Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “Rising business rates are threatening high streets all over the country. This is a regressive tax that hits firms before they’ve made their first penny in turnover, let alone profit.   “Increases in rates bills are set to significantly outpace inflation this year. Thousands of small firms will see rates soar once they lose their year one cap on increases today.   “Too many small firms have been left waiting months for support from the ‘emergency’ business rates hardship fund launched this time last year. After 12 months of central government, English councils and software providers playing the blame game, we need a guarantee that none of the year one funding from the £300 million initiative will be lost now we’re rolling over into year two of this bruising revaluation.       “It was good to see the Chancellor address business rates at the Spring Budget and commit to more frequent revaluations across England. Done right, this will make the rates regime fairer, meaning bills better reflect up-to-date property values and the strength of the local economy. But more frequent revaluations must not mean more admin burdens for small firms.    “FSB has always supported the need for minimum wage rates. It’s good to see that today’s increase in the NLW respects our recommendations as well as those of the Low Pay Commission.   “Small firms are helping to keep employment levels close to record highs. Now they need more support in managing the costs associated with making that possible. It’s time for the government to deliver on the promise of a national insurance holiday for small businesses that employ those furthest from the labour market.   “Four in ten small firms say labour costs are a main cause of increased outgoings. That proportion will likely rise when their auto-enrolment contributions double in a few days’ time.”

Source: East Midlands Business Link

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