FSB urges councils to take common sense approach for firms impacted by rates rises

Councils across Greater Manchester are being urged to prepare for the fallout caused by the latest revaluation of business rates bills from the Valuation Office Agency (VOA) as new bills start to land.

The Federation of Small Businesses (FSB) has warned thousands of small businesses across GM are starting to receive bills for the new tax year, with many containing the unwelcome news that the amount of the tax they have to pay has gone up.

The UK’s largest business lobbying and support organisation says some councils may not be prepared for the volume of calls they will get, and has asked for patience and a ‘light touch approach’ by authorities if none-payment occurs while the inevitable avalanche of appeals are processed.

Business rates are currently revaluated every three years by the VOA, whose officials analyse the rental property market to ensure rateable values reflect the property market accurately and the amount of tax levied on a property, which can change accordingly.

While the VOA sets the rates, it falls on local councils to collect the sums – which is usually one of the biggest costs for small and micro businesses, and has to be paid regardless of profit.

FSB Greater Manchester Area Leader, Anne Lambelin, said: “New bills are starting to land and we know many businesses are in for quite a nasty shock – particularly in already hard-hit sectors such as retail and hospitality.

"What we are asking for from councils across GM is patience and understanding.

"Patience, so businesses who are appealing the new charge with the VOA are not hounded until the appeals process returns a decision.

"And this is likely to take time as the VOA’s appeals system will be facing a barrage of applications come April.

“But we need understanding, too.

"The default position of councils for non-payment of business rates is often the courts, but what we need now is a light touch approach to avoid this, and a case-by-case mentality applied in terms of how councils help businesses pay.”

The Federation says the latest cost pressure comes at just the wrong time, with firms already reeling from the pandemic, inflation, reduced consumer spending, and energy support also due to cease on March 31.

Lambelin continued: “Come April it’s likely councils are going to be inundated with calls from businesses querying their bills, and there will be some who just can’t afford to pay.

"It’s as simple as that.

"Now is the time for town halls to get their ducks in a row and work out a consistent approach across GM on how they are going to handle what for many small business owners will be another existential crisis.

“A lot of businesses were simply unaware business rates were being revaluated, so new bills revised up will be coming as a massive shock.

"Most have simply been busy trying to survive the cost of doing business crisis, mitigate the energy crisis, pay back debt taken on during the pandemic – never mind dealing with staff shortages and rampant inflation.

“This latest cost increase on rates is going to be a bolt from the blue, and the absolute last thing businesses need.

"We now know post-Budget that the Government has created a cliff edge moment by effectively cancelling the energy support tap for businesses also on April 1, so this really could be the end of many businesses if councils don’t show some understanding,” she added.  

As per VOA rules, businesses cannot appeal their new revaluation until April 1, once the new tax year starts.

This means there will likely be a deluge of appeals at the start of the new month.

This is the first revaluation of business in six years due to the pandemic, although the Government has committed to doing them every three years now to avoid big changes.

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