Businesses braced for £1.2bn tax hike with rates rise

BUSINESSES IN England and Wales are bracing themselves for a £1.2bn tax hike next year, while a staggering number of companies are being dragged to court for failing to keep up with climbing payments.

Business rates specialist CVS expects a hefty rise in business rates next year, as the September Retail Price Index (RPI) – used to determine the following year’s increase – is set to come in at four per cent when official figures are released tomorrow.

It means the Government could rake in an extra £1.2bn in business rates – which are calculated based on the rateable open rental value of a premises – on top of the £23.9bn it is expected to bring in from English businesses this year.

The move is expected to increase hardship among English and Welsh companies, many of which were left reeling following the revaluation of business rates earlier this year, which accounted for property price changes over the last seven years.

Furthermore, a Freedom of Information request filed by CVS shows that 164,757 business premises in England and Wales were hauled before a magistrate in 2016/2017 after failing to pay their business rates.

It means that around one in every eight businesses received a summons on those grounds from their local council, CVS said.

North Tyneside Council in the North East issued the greatest number of summons at 34 per cent of businesses, while Middlesbrough Borough Council, London’s Borough of Haringey, and Luton Borough Council issued summons to 27 per cent of businesses within their jurisdictions.

In the current financial year alone – counting the period from April 1, when the controversial business rates revaluation took place, to the end of August – a total of 81,093 businesses have been summoned to court for failing to pay their business rates.