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BCC calls on exchequer to abandon business rate rise

Melanie Tringham

This would cost the exchequer about £1.7bn, equivalent to 0.1 per cent of total government spending. The BCC said this could be accommodated in the government’s fiscal plan by using some of the £11.5bn underspend from last year.

John Longworth, director general of the BCC, said: “There is no question that the business rates system is broken. This is a tax that hits companies of all sizes long before they make a profit, and acts as a drag on business growth and investment. Firms across the UK have been crying out for relief from these burdensome taxes for years, but so far their pleas have been ignored.

“It is cynical to freeze council tax while allowing the pain caused by business rates to continue, and goes against pro-business pledges made by the government.”

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The BCC said in its submission to the chancellor, that business rates made life difficult for businesses, because of an already uncertain cash flow. It pointed out that they were imposed on businesses regardless of their stage of economic cycle or company performance. The BCC added that companies have had to absorb “relentless” increases in uniform business rates in line with the September Retail Prices Index figure.

The 2.6 per cent rise in April followed rises of 5.6 per cent in 2012 and 4.6 per cent in 2011.

Mr Longworth said: “We need a new framework that is more flexible, transparent and responsive to changes in the economic environment.”

Adviser comment

Dan Clayden, director of Devon-based Clayden Associates, said: “My business rate has been zero for the last couple of years, because you get an exemption if the size of your premises is under a certain amount.

“Business rates are the equivalent of council tax, they are there to pay for amenities that are run by the local council. People spend eight or nine hours a day, or 60 to 80 per cent of their time away at work and bins have to be emptied.