UK business pays three times more property taxes than their competitors in Europe, according to a scathing new report into the burden on small companies.
As small firms get to grips with hikes of as much as 15.7 per cent in their business rates, the Federation of Small Businesses has published the study that finds the nondomestic business rates affecting all enterprises account for 4.2 per cent of the total UK tax take.
This compares to France where all property taxes - including domestic - only make up 2.3 per cent of tax revenue, Sweden where the figure is two per cent, Spain and the Netherlands where it is 1.9 per cent and Germany where the percentage is as low as one per cent.
The finding comes as 1.7 million businesses in England receive bills detailing their rates liability for the new financial year.
Many small firms have seen an increase in their business rates bills and retailers are hit the hardest with an average 15.7 per cent increase in costs.
The FSB argues that not only do business rates have a disproportionate impact on small firms but that the burden of non-domestic rates puts all business at a competitive disadvantage when it comes to competition from abroad.
FSB business rates chairman Roger Culcheth said: "It is time that England's 400 year old system of property taxes was completely overhauled.
"UK businesses pay as much as three times more property taxes than their competitors in every other European country.
"The very high contribution non-domestic rates make to the Exchequer compared with our major trading partners puts UK businesses, and especially small businesses, at a competitive disadvantage."
He said the Government needed to act to reduce the business rates burden by imposing a moratorium on the annual increases in the multipliers.
As things stand business rates are a high yielding tax, raising £19 billion in 2004/5.
For many small companies, business rates are often the second or third largest item of expenditure after salaries and rent payment.
