Chancellor u-turn on business rates rise
Kingston businesses were given some good news after the government reduced the planned 5% increase in business rates to 2%. The Leader of the Council’s had written a letter to the Chancellor on the topic last week.
However, firms will still have to wrestle with government red tape before seeing their taxes cut. They will have to pay the full 5% rise until June, and can only then apply to the council to defer 60% of the increase.
We welcome the government’s change of heart, which will give local firms some welcome breathing space at this difficult time. Many companies would have found a 5% tax rise crippling, and for some it could have been the straw that broke the camel’s back.
We know that business groups have long been lobbying against this tax increase, and we have supported them in their efforts. We are glad the Chancellor finally listened to reason.
However, this does feel like a last minute government panic. Alistair Darling had months to change the policy, but only did so hours before the tax rise was due to take effect.
Small businesses will still have to jump through hoops before they can pay the lower rate. The government should make this tax reduction automatic for all firms, instead of forcing them to apply for it.