The national press spent the Parliamentary recess chewing over the latest review into business rates. Unsurprisingly, that coverage has caused some alarm amongst local businesses who now fear that their revalued rates will mean more taxes.
Until the new valuations reach businesses next month, we don’t know exactly what it means for each individual company but on average, businesses in Mendip will see a rates cut of 4.6% whilst in Sedgemoor the average tax cut is 4%. For the very smallest businesses, the whole thing is irrelevant because Small Business Rate Relief remains in place permanently meaning that they do not and will not pay any business rates at all. And further good news is coming for rural communities with a doubling of the 50% rate relief announced in the Autumn Statement for the last petrol station, pub, post office or general store in a village. That means that from April 2017, those businesses will now receive 100% relief from business rates so won’t be paying anything either.
These seven-yearly reviews of business rates are necessary to make sure the tax burden falls equitably for businesses. In seven years, some businesses have expanded their operations whilst others have contracted. Online businesses operating from a small office are making as much, or more, in revenue than those operating from a large warehouse and yet the latter is paying far more in rates.
On average, the review means a tax cut for businesses across the Wells Constituency but I will be waiting as eagerly as anyone for the valuations to start arriving and for the impact to become clearer. Our local economy has been doing well and whilst tax cuts are very welcome, any disproportionate tax rises will need to be challenged.