Bolton South East Conservatives

Delays to Business Rates Deferral Scheme will hurt Small Businesses

Conservatives today criticised Government delays to a last-minute Government scheme allowing businesses to defer partially this year’s massive hikes in business rates until 2010 and 2011.

Thousands of independent small businesses and shops risk closure as delays in the vaunted business rates deferral scheme mean that businesses now face additional costs of up to £100 million in extra business rates payments, which many will be unable to pay.  Companies most at risk, that have already struggled with payments and lost the right to pay by instalments, are ineligible for the scheme. 

The scheme, announced in March, is designed to help businesses facing large increases in their business rates bills due to an inflation busting 5% rise and the ending of transitional relief. It will enable businesses to pay 40% of the rise this year and put off paying 60% of the rise till 2010 and 2011. However, Shadow Communities and Local Government Minister Justine Greening MP has warned it is likely that many companies will have paid much more than 40% of this year’s rise before they are allowed to defer any rises.   

Ministers admitted in answers to Parliamentary Questions that they will not pass legislation to implement the scheme until the end of July with local authorities likely to need until September to send out lower bills.  Companies are not eligible for refunds on rates paid until the scheme is up and running. Local authorities will then have to take several weeks to contact all businesses to find out which want to take part in the scheme, amend their billing systems based on the response and then rebill companies for a second time at a lower rate. 

This will mean that companies will have already paid more than 40% of their rates bills, so will not be able to defer the 60% promised by the Government. The Government had claimed that businesses would be able to defer around £600 million across 1.6 million properties. However, if the scheme if not operational until August, only £500 million will be able to be deferred, and if companies have to wait till September, they will only be able to defer £400 million, forcing them to pay an extra £200 million this year.

Cllr Andy Morgan, Conservative Parliamentary Candidate for Bolton South East said "It is bad enough that we are in the throws of a recession but Labour Ministers  seem content on destroying our nation of shopkeepers  who, I believe, are the backbone of Britain’s economy.  It is totally  out of order for Brown’s minister to promise businesses they only have to pay 40% of their bill this year, and then delay bringing in the deferral scheme until after they have already paid more than this. Many of these businesses are community shops that provide vital services right on peoples’ doorstep." 

“The Government has hit businesses with a 5% hike in rates, as well as huge increases due to the ending of transitional relief, and now it turns out that the scheme designed to help has been over-hyped, adding hundreds of millions to businesses’ bills.  Bolton's small to medium size businesses are already suffering due to the recession, this just might finish some of them off, it’s a disgrace.”