The British Chambers of Commerce has called for action on business rates in this week’s Budget.
Statistics from the BCC’s quarterly economic survey showed two in five businesses were more concerned about business rates than three months ago.
The BCC has put forward four measures it wants the Chancellor of the Exchequer to take in his Budget on Wednesday (8 March), including bringing forward the switch from rates rising in line with RPI inflation to CPI inflation expected in April 2020.
Adam Marshall, director general of the BCC, said: “The UK had the highest business property taxes in the developed world even before the recent revaluation - hammering firms with sky-high costs before they turn over a single pound.
“This undermines business investment, which in 2016, fell for the first time in seven years.
“Businesses face a tipping point: with rates rising for many and the combined costs of currency depreciation, the new National Living Wage, pensions auto-enrolment and rising energy prices - urgent action is needed to reduce the upfront costs of doing business.”
From 1 April business rates, which are based on how much annual rent could be charged on a property, will be revalued for the first time since 2010.
The last revaluation took place shortly before the property crash of 2008, meaning a large number of businesses will see rates either fall or stay the same but some – particularly in London and the south east – will see their rates jump, which has prompted criticism of the government.
Last month the Treasury Select Committee said it would take evidence on the changes to business rates, expressing concern that the current system benefits large, out-of-town premises over small high-street firms.
Interim statistics from the BCC, based on the responses of over 900 companies, show 39 per cent of businesses are more concerned about business rates than three months ago, second only to those reporting higher concern around exchange rates (42 per cent) than three months ago.
The results show that it is small businesses who are most worried about the burden of business rates, with one-in-two (50 per cent) saying it’s of greater concern, the highest of any factor.
The BCC called for four measures in the upcoming Budget: the abandonment the fiscal neutrality principle in business rates reform, the dropping of proposals that would restrict the ability of the Valuation Tribunal for England to order changes to business rates liabilities, the bringing forward of the switch from RPI to CPI and the removal all plant and machinery from the valuation of property for business rates purposes.