Top official warns on rates storm

ENTREPRENEURS starting new firms should be given special treatment with a three-year business rates ‘holiday’, according to a list of demands published by Richard Branson’s Virgin StartUp.

The organisation, a not-for-profit arm of the Virgin Group, also wants the UK Government to consider introducing exemptions for firms turning over less than £300,000 a year. Such a scheme would mark a big departure from the present system, by linking the size of a firm’s rates bill to its sales rather than the value of the building it occupies.

The intervention from Virgin StartUp, which provides Government-backed loans to new companies, follows UK-wide anger over rates rises.

Recent rates revaluations have stirred up a major political row, as many firms have complained that steep rises in bills bear little relation to their ability to pay.

In Scotland, Finance Secretary Derek Mackay was forced last week to bow to pressure from businesses hardest-hit by the rates revamp.

Following a widespread backlash, he confirmed hotels, restaurants, pubs and cafes would face an increase of no more than 12.5 per cent. Comparable measures will be extended to renewable energy projects. However, many firms in Scotland will still be hit by hefty increases.

Virgin StartUp is pressing for rates relief south of the Border. Managing director Mei Shui said: ‘Britain has a proud history of supporting innovators. This Government is in danger of losing sight of that with its proposals for business rate rises. If this country is going to prosper following Brexit, entrepreneurs are going to be the cornerstone of our economy, which is why we’re calling on the Government to introduce a number of rate-relief options.’

The body wants a higher revenue threshold to protect firms in London, where property values have soared, and is calling on the Government to boost funding to deal with appeals.

Last August, The Mail on Sunday told of a ‘meltdown’ amid a huge appeals backlog. Concerns over this were heightened last week when it emerged that more than 250,000 were still outstanding.

Last week, Conservative Party vice-chairman Mark Field urged Chancellor Philip Hammond to back down from the ‘looming nightmare’ of higher business rates.