Companies forced to wait for business rates reduction

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Businesses will not be able to defer part of next April’s increased business rates despite the government saying they would be able to do so.

In his Autumn Statement the chancellor said firms would be allowed to defer 60% of the increase in their 2012-2013 business rate bills, due to apply in April 2012, to the two next years.

However, the Department for Communities and Local Government (DCLG) has told local authority finance offers they will have to charge the full amount because the scheme won’t be launched in time.

The DCLG has said this is because the department won’t have the calculations and legislation set up in time.

A spokesperson said that until the legislation is in place, businesses will be charged the full rate. Once it is, those two months will also be taken into account, like when you pay too much tax. Businesses will still feel the benefit of the discount but it unfortunately won’t be in time for April/May’s bills.

John Walker, national chairman of Federation of Small Businesses, commented: “Small businesses up and down the country will be disappointed that only a week following the government’s announcement they will be able to defer 60% of the increase in their business rate payments. It now won’t be in place in time for the April rise.

“Business rates are the third largest outgoing for many small businesses, and next year’s increase – due to high inflationary rates – is going to hit them hard, so they need all the help they can get to ensure they can manage their cash flow and get through what is going to be another tough year for businesses.”