Business Rates: call to stop online firms being let off the hook

A plea has been made to the government to help small companies and stop letting online firms off the hook.

The Federation of Small Businesses has written to ministers with its recommendations for change ahead of the government’s Autumn Statement expected in November. 

In spring 2020 the government announced that estate and lettings agencies were to be included in the business rates relief introduced because of Coronavirus. That came after a campaign led primarily by Propertymark, following the rate relief given to other sectors of the economy a few weeks earlier.

However, business rates - now levied at their previous levels - have returned to become one of the biggest costs for some small agencies.

FSB national chair Mike Cherry, in his letter to ministers, describes the tax as “regressive and outdated”, and encourages policymakers to remove some of the smallest businesses from the tax, and getting rid of a quirk in the system that causes a firm operating across two premises to be charged rates even if its total valuation should see it qualify for relief.  

It also wants all childcare providers exempted from business rates to bring England into line with Wales and Scotland. 

Cherry says: “The government is absolutely right to overhaul a business rates system which often lets online retailers … off the hook whilst punishing small businesses that serve as community hubs.   

“This is a levy that hurts small firms trying to do the right thing: if you put solar panels on the roof to aid your transition to net zero, or install ventilation to support the wellbeing of your staff, the Valuation Office Agency will advise your local authority that you should by paying more in business rates.

“As we look to aid the small business community’s transition to net zero, and employee safety and wellbeing as we come out from the pandemic, this simply cannot be the right approach to taxation.

“Instead, we should be aiming to take more small firms out of the system altogether, not least our childcare providers, who have done so much to support families throughout an incredibly tough 18 months and are finding that making ends meet is an increasingly precarious business.   

“Renewed efforts to ensure that rates bills are based on fair valuations are welcome and much needed – the more we can move to rolling up-to-date valuations, the more we can ensure this is a fair system fit for the digital age.”