The Uniform Business Rate will rocket from 43.3p per £ of Rateable Value to 45.7p with businesses in London paying an additional 2p per £ as their contribution to the funding of Crossrail.
Jerry Schurder, Head of Rating at Gerald Eve said: “A tax rate approaching 50% whilst the country still experiences economic struggles will prove unsustainable to many businesses. Ever since the Uniform Business Rate was introduced in 1990 successive governments have linked the UBR to the previous September’s inflation figure even though the legislation permits the adoption of a lesser figure. The Government claims that it expects inflation to tumble next year in which case it should surely assist businesses and the struggling high street by holding business rates for 2012/13 in the same way as it found funding to freeze Council Tax for a second successive year.”
The rates increase are even more eye watering however for some 171,000 businesses whose bills are still being phased in following the rating revaluation in 2010. These ratepayers will see their bills shoot up by 26.7%.
“The Government has moved to use the lower CPI measure of inflation to which it links certain payments it makes such as benefits and consideration should be given to also adopting CPI for linking business rate payments.” Schurder added.
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