Business rates a hurdle for regional growth, says accountancy firm
Bishop Fleming, a leading regional UK accountancy firm, has urged greater focus on plans to devolve business rates.
With new plans for local councils to have the power to keep and spend the money raised through business rates, certain issues may affect the viability of local businesses across the wider UK economy.
Bishop Fleming said that the new measures will be geared to a "flawed" property valuation, as opposed to business performance.
Managing partner at Bishop Fleming, Matthew Lee, explained: "Devolving business rates to local councils is irrelevant to most businesses, because it does not change how much they have to pay, or how it is calculated."
Lee went on to add that the new "root and branch reform of Business Rates" was "an iniquitous tax". This is because every business that is the occupant of a property, be it an office, shop, or industrial use space, has business rates as one of their major outlays.
Although in many areas council tax increases have been frozen or seen only small increases, business rates have gone up steeply. They are guaranteed to increase every year by being index linked to inflation - the only tax to have that connection.
Lee believes that this is having a negative effect on UK SMEs by limiting their ability to invest for growth.
"UK businesses pay the highest business rates in Europe – more than Germany and France combined," he pointed out.