Business rates across the UK are set to rise next month causing small businesses to prepare to reduce investment and staff costs, a Federation of Small Businesses (FSB) survey shows.
The FSB has around 4,000 members in Greater Lincolnshire with small businesses making up 99% of the county’s business population.
The research finds that more than a third of small firms expect to see their business rates increase from April 1.
Of those facing a rates rise, some 44% of FSB members say their business rates will eventually rise by more than £1,000 per annum.
Most alarmingly just over one in five will see their annual bill increase by more than 40%.
Such drastic hikes could have massive consequences for the growth of those small businesses hit by this rates bombshell.
Mike Cherry, FSB National Chairman, said: “The business rates system is an unfair, regressive tax which hits small firms before they’ve had the chance to make their first £1 in turnover, let alone profit.
“The major win at the latest budget to exclude 600,000 small firms from the business rates system remains hugely important.
“However, our survey shows the delayed revaluation harms too many small businesses who face unsustainable and unaffordable rises.”
Of the one in three small businesses facing a rise in rates, 54% expect profits to fall, whilst 38% are set to increase prices.
Crucially, 55% plan to reduce, postpone or cancel investment in their business, which will hit UK productivity and growth.
The survey data indicates that of those small businesses facing an increase in their business rates, almost one in five may ultimately consider closing down or selling their business as a result of the hike in their bills.
Mike Cherry said: “While many of these businesses which may have contemplated the possibility of closure will ultimately find a way to carry on, the current level of anxiety within the small business community should worry policymakers.
“Profitability across the UK small business community is already falling. The costs of doing business for small firms are now at their highest levels since early 2014.
“The last thing we need is a business rates burden so heavy that it threatens the future growth prospects of our entrepreneurs.
“To add insult to injury, those who need to challenge their revaluation assessment are now faced with a new but rigged appeals system, which will prevent small businesses with genuine concerns about their rateable values from being able to seek justice and redress.
“We are concerned that many could turn to cowboy ratings agencies already bombarding business owners with letters promising the earth.
“The seven year gap between this year’s revaluation and the last has stored-up all kinds of problems for our business community.
“The solution is for the Chancellor to use his Spring Budget to announce a cross-party commission to propose measures for a replacement business tax system linked fairly to the ability to pay.”