One in five high street shops could be forced to close due to business rates hike

By

Barbara Santamaria

Published
Feb 27, 2017

A significant proportion of small businesses across Britain may consider closing down or selling once business rates rise next month, according to a new survey from the Federation of Small Businesses.

From 1 April an estimated 36% of high street shops will see their business rates hiked, and of those facing rises, one in five may consider closing down or selling their business, revealed the survey.

Businesses in property hotspots will see their rates increase significantly. In fact, 44% of FSB members say their business rates will eventually rise by more than £1,000 per annum.

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The 2016-2017 business rates are estimated to raise £29bn in total, however the system has been called “unfair” for small firms by FSB national chairman Mike Cherry.

Businesses with a rateable value of less than £12,000 will be exempt from the tax, but Cherry urged the Chancellor to raise relief thresholds as part of his Spring Budget because “the delayed revaluation harms too many small businesses”.

“A small hardship fund designed to assist pockets of firms throughout the country would go a long way to resolving the anxiety felt within the small business community.”

54% of small businesses expect profits to fall due to the business rates rise and 38% will increase prices. Alarmingly, 55% plan to reduce, postpone or cancel investment in their business, which will hit UK productivity and growth.