Pubs, cafés and small shops face 'sky rocketing' business rates bills
By David Wood | 16th November 2023
Jeremy Hunt is being called on to act now to save thousands of pubs, cafés and small shops from sky rocketing business rates bills.
With just one week to go until the Autumn Statement, the Federation of Small Businesses (FSB) - the UK's largest business group - has said: "Government is about choices and the Chancellor must concentrate his firepower where it can do most-good - small firms and the 16 million jobs they support. The prize for getting this right is massive."
Without action, small firms face a triple whammy of threats:
- The so-called 'small business multiplier', which is set to slap a whopping inflation-linked increase on ordinary businesses.
- The most under pressure high street firms face a quadrupling of their bills when the 75% retail, hospitality and leisure discount expires in March.
- Large firms are increasingly leaning on their small suppliers for cashflow by delaying payments.
FSB is calling for urgent and comprehensive action to power the economy, including tackling small businesses rising rates bills; action on late payment; and helping people train to expand their businesses and grow the economy.
Small businesses are considerably more vulnerable than their larger counterparts - 35% of micro-businesses have less than three months' worth of cash reserves, according to the ONS.
FSB policy and advocacy chair Tina McKenzie said: "Thousands of pubs, cafés and small shops face sky rocketing business rates bills unless Jeremy Hunt acts at the Autumn Statement. We are at a crossroads for the future of our economy. Real life businesses need a platform to power through troubled times.
"Government is about choices and the Chancellor must concentrate his firepower where it can do the most good - small firms and the 16 million jobs they support. The prize for getting this right is massive.
"Small firms face huge inflation-linked increases to the so-called Small Business Multiplier in April - worse, this is timed to coincide with the scheduled withdrawal of tax support to the high street. Big retailers have already gotten a rates bonus from the last revaluation, but small firms have had an incredibly bruising few years and want to see a hopeful message from the Government.
"The Chancellor has built a reputation as a steadying hand, but he and the Prime Minister must now act to secure the prosperity on which future stability depends. As well as urgent action on rates, that means tackling real bread and butter issues blocking small firms from success, like late payment and skills shortages.
"The Autumn Statement is the key moment for Parliament to stand up for the small firms across the country who work hard, pay a fortune in taxes, and provide the jobs our communities need. Small firms will be watching and hoping that the Chancellor delivers what the country needs. Jeremy Hunt must seize the moment.
"The prize if the Chancellor gets this right is massive. Small businesses have an amazing capacity to grow, expand and generate the increases in living standards that everyone across our country needs. Combining stability with prosperity is the key.
"The UK economy has proved time and time again that it is resilient. With the right Government approach, we cannot just get through difficult times, but secure a positive more prosperous future for all of our local communities and the businesses that make them what they are."
Meanwhile, a host of hospitality groups have called on the Chancellor to freeze business rates and to extend reliefs as business lobbyists warn a failure to do so risks jobs, businesses and the future of the high street.
A letter to Chancellor Jeremy Hunt and Secretary of State Michael Gove was signed by representative bodies the British Retail Consortium, UK Hospitality, Association of Convenience Stores, British Independent Retail Association and UK Active.
The letter says: "An inflationary increase in the business rates multiplier and removal of reliefs would be disastrous for our sectors. It will mean business failures, job losses and boarded up properties in our high streets, denying people their livelihoods and their social pleasures."
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