The parade of shops facing business rate hikes of up to ... 3,000pc
TODAY Money Mail reveals the biggest victims of the business rate tax hike — the family-run shops facing increases of up to 3,000 pc.
This is 600 times higher than the 5 pc cap on rises the Government insists it has implemented for small businesses.
A loophole means many of the country’s smallest and most vulnerable shops will be worst hit by the changes.
Our research found one case where eight shops on a small parade of 30 stores will each have to find an extra £3,000 in tax this year thanks to increases of more than 1,000 pc. The hairdresser faces a rise of 3,115 pc, the noodle bar a 2,049 pc increase and the fish and chip restaurant will pay 1,186 pc more.
In total, 17 of the 30 shops in the Market Place square in the Hertfordshire town of Hatfield face paying £50,000 more in rates this year and £400,000 more over the next five years. Its hair and nail salons, cafes, takeaways, grocery stores and delis all face closure as a result.
The giant hikes in so-called business rates threaten to destroy the livelihoods of shopkeepers across the country.
Without protection for small firms, entire High Streets could disappear. So as part of our Save Our Shops campaign launched earlier this month, Money Mail is calling on ministers to soften the blow. The Govern- ment must find a way to help businesses hit by the highest increases — and then overhaul the way the tax is calculated.
The Department for Communities and Local Government has repeatedly said: ‘No small business will see more than a 5 pc increase this year.’
This is supposed to help firms adjust. But our research exposes a major loophole in these so-called transitional arrangements.
Crucially, the 5 pc cap fails to take into account the tax relief currently helping small shops such as those in Hatfield. Properties worth less than £6,000 a year on the rental market pay no business rates at all. Those worth between £6,000 and £12,000 get discounts on a sliding scale.
From April, properties with a rateable value of up to £12,000 pay no rates. Those between £12,000 and £15,000 will receive discounts on a sliding scale. This sounds more generous than the existing scheme.
But in areas such as Market Place the property market has soared by so much that they will be stripped of the discounts.
Sixteen of the 17 shops that face rate rises in April have lost relief this year after the rateable value of their premises rose above the £12,000 threshold.
In four cases, the shops were previously worth less than £6,000, meaning they paid no business rates at all. Now these shops will have to find between £2,800 and £2,900.
It’s a burden many cannot shoulder in this faded parade, which has clearly seen better times. Despite its name, the Market Place