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A further review of business rates is required

  • Bailiffs sent in to collect 115,000 business rate debts in just 12 months​

 

Ahead of the Chancellor’s anticipated announcement of a cap on Business Rate rises, the UK’s only small business focused debt advice charity is warning that more in depth review of the business rate regime is required.
 
Research* from the Money Advice Trust – the charity which runs Business Debtline – has found that local authorities have referred 115,000 business rate debts to bailiffs in just 12 months. Many small businesses across the UK find that business rates can be a big hurdle to successfully stabilising a business in its first few years of operation and can often lead to otherwise unnecessary company insolvencies.
 
Joanna Elson, Chief Executive of the Money Advice Trust, said:
“The Chancellor’s cap on Business Rate rises should be welcomed, though many small businesses already struggle to keep up with business rate payments in their early years, and a two per cent rise will push more SMEs into arrears.
 
“There is more that could be done to the business rates regime to help small businesses prosper. One example of this is the current business rate relief programme, which in its current inception extremely few small businesses are eligible for. This programme could be used more effectively to safeguard those businesses that are likely to grow in the coming years.
 
“Local authorities could also take a longer-term approach to dealing with business rate arrears. Our research shows that bailiffs were used 115,000 times to collect business rate arrears in just 12 months. Having a bailiff knocking on the door of a business can be extremely damaging. We urge local authorities to work harder to avoid sending bailiffs to collect business rate arrears.
 
“There is a great incentive for the Government to do more to support struggling small businesses. Small businesses provide employment, help keep our high streets vibrant, and often provide fresh ideas that can propel entire industries forward. Our Business Debtline advisers hear from thousands of small business owners every month, who could help drive growth in the UK economy with just a little more support.”
 
© Money Advice Trust Charity Number 1099506
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