Business rates have gained considerable attention in the last week as the government announced the first revaluation of the cost for 7 years. Coming in to effect on 1 April, this change will have an impact on businesses of all sizes, with tens of thousands of firms facing uncertainty as to whether they will ultimately be paying more.
The rates themselves are considered a commercial version of council tax, and are paid on the rateable value of the space that a business occupies. The amount paid depends on the size of the property, as well as the purpose of what the space is used for. The rental value is supposed to be measured every 5 years with the previous review scheduled for 2015; however, the government delayed the previous revaluation period for two years.
Some London businesses face increases of more than 100%, while in areas where property prices have fallen, for example the Midlands and North of England, many have been paying more than they should for the past two years.
Business Rates can have a significant effect on many small businesses located within areas that are ‘on the up’ as they may see their rates bills increase, regardless of whether they have the ability to pay or not.
Whilst many will appeal the decision made, the Valuation Office Agency still have a backlog of around 280,000. No matter the outcome, this significant cost may have a detrimental effect on the cash flow within many small businesses, leading to sacrifices having to be made elsewhere. This could mean that businesses will put their dreams for growth and development on hold, to divert the money necessary to cover the cost of the business rates increase.
Don’t let business rates disrupt your business
Alternative finance can help turn those dreams into a reality, even while diverting your business cash flow to paying the necessary cost of your rates. This source of finance will allow you to make investments into the areas of business that truly need it, while preserving your capital by allowing you to spread the cost.
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Whether you’re looking to develop your business through marketing, recruitment, refurbishment or more; or to pay off those recurring expenses such as your Corporation Tax or VAT, LDF can provide a solution that makes money work for your business.