Black Country businesses have called on the Government to review its plan to increase uniform business rate 4.9 per cent in April, branding its calculation method “madness”.
Many are unaware of the increase and so unable to prepare, argued the region’s Chamber of Commerce.
There are concerns the new business rate figure is based on inflation last September, just before the economy started to nosedive, without accounting for the falls in inflation recently.
Mike Dell, president of the Dudley chamber, said: “To hit businesses with a 4.9 per cent increase at a time like this, and to base that on a figure ridiculously out of date is madness. It’s almost as if whoever made the decision is completely oblivious to what has happened to the economy over the past six months.
“By being based on September’s unusually high inflation, the business rate multiplier will be well in excess of the expected level of inflation for 2009 and beyond. An increase in business taxes at this time would completely negate the introduction of business support measures by the Government and could have devastating consequences for small businesses, many of whom are already struggling to pay business rates.”
Black Country Chamber met regional minister Ian Austin to discuss the issues, and organised a survey among members to provide evidence to support its stance.
Almost three quarters said a 4.9 per cent rise would have a “significant” effect on their businesses. Two thirds said they would prefer no increase, with a quarter saying a rise of between one and two per cent would be acceptable.
When asked what measures should be implemented to assist the payment of business rates, 62 per cent called for a freeze until growth in the economy, over one-in-five wanted a reduction in rates for specific sectors, while eight per cent suggested a payment holiday.
Mr Dell added: “This is an important issue that appears to have been missed by commentators because of everything else that has been going on with the recession. It will affect hundreds of businesses around the Black Country and we will continue to lobby the Government in the run-up to April’s budget.
“There is also growing concern about the lack of relief on rates for empty properties. This would be an easy and effective way to help businesses, yet there has been no movement from the Treasury, and again we hope this is addressed in the Chancellor’s statement.”
