Business rates need a “radical overhaul”

Martin Searle, Regional Development Manager, met businesswomen Natalie and Stacey Chithick from Bump 2 Baby, an FSB member firm

Martin Searle, Regional Development Manager, met businesswomen Natalie and Stacey Chithick from Bump 2 Baby, an FSB member firm

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Eastbourne bosses believe the business rates system needs a ‘radical overhaul’ as more than one in 10 are paying more in rates than rent.

A survey polled 2,425 Federation of Small Business members and found that a fifth of respondents pay full business rates, with three in 10 firms receiving some form of rates relief.

However, the FSB is concerned that seven per cent of respondents paying business rates say they pay more in rates than in rent. A further six per cent say their rates and rent costs are about the same.

The findings were supported by a recent visit to Eastbourne by the FSB in support of its Keep Trade Local campaign. The campaign aims to rejuvenate support amongst shoppers for independent retailers and encourage people to use their local High Street more. Martin Searle, regional development manager, met businesswomen Natalie and Stacey Chithick from Bump 2 Baby in Little Chelsea. Natalie said, “The rent and rates in the town centre are too high so we cannot get close. But here there is lower customer footfall, so we cannot win.

“We work on providing lovely niche products that we hope customers will come slightly out of their way to buy. And friendly customer service is the key to people returning – especially for dads and grandparents. ”

The FSB agrees that the impact of business rate increases is becoming unmanageable for many firms. It believes the business rates system is cumbersome and overly complex and wants the Government to undertake a formal review to make it simpler and fairer.

Mr Searle said, “The current rating system is a blunt tool. It takes no account of ability to pay, or changes to economic conditions. It is based on rental values but only adjusts its valuation assumptions every five years. Its treatment of empty property is tantamount to a tax on no income. The FSB wants to see a level playing field for all businesses so the green shoots of economic recovery can continue.”