The Business Centre Association (BCA) is calling upon Alistair Darling to freeze business rates, abolish the empty property rates levy and provide automatic rate rebates in a bid to help businesses in challenging economic times.
Supported by the Mayor of London, Boris Johnson, the BCA – the UK’s sole trade association for the business centre and managed workspace industry – is lobbying the Chancellor to comprehensively review the shambolic rating system when he delivers the budget on 22 April.
The Mayor of London, Boris Johnson, said: 'It is vital that we do all we can to help business through this economic downturn. One important change the Chancellor can make is to restore empty property relief, and I urge the Chancellor to review fully this tax immediately and remove this unfair burden that businesses and other organisations are bearing during these difficult times.
“The government has conceded there should be some relief for properties with rateable values of under £15,000, but that has much less impact in London than elsewhere because property is more expensive.'
Under the Freedom of Information Act, the BCA discovered that taxpayers are now footing a staggering £690million bill on rates bills for empty property owned by UK Local Authorities.
Jennifer Brooke, executive director of the BCA explains: “Charging business rates on empty property in the current financial climate is nonsensical, it is draining money away from regeneration and economic growth across the country, at a time when this is a priority.
“In addition, Darling’s recent announcement that the planned increase in the Uniform Business Rate 2009/10 of 5 per cent will be changed to an increase of 2 per cent - this does not go far enough as businesses are still faced with larger bills.
“On behalf of our members, we have lobbied the Government to freeze the business rate increase to reflect the Retail Price Index, which is at zero per cent. In addition, the deferral should have been automatic rather than 1.6 million ratepayers having to apply for the rebate.”
With an election looming next year, it is a make or break Budget for the Labour Party. Public finances are stretched to the limit and the Chancellor has admitted that a revision in the economic forecast for 2009-2010 is required and that the Pre-Budget Report predictions have underestimated the extent of the recession.
In addition to clamping down on tax havens and increasing personal taxation, rumours are rife of an increase in VAT, from its reduced rate of 15% to 18.5% or even 19.5%.
The BCA is an independent organisation and its 700 member locations accommodate more than 40,000 SMEs and international businesses nationwide in city centre and out-of-town business locations. The BCA has surveyed its members to understand what businesses want to see in this year’s budget.
Brooke explains: “Small businesses have made it clear to the BCA that they want to see a reduction in employers’ National Insurance contributions, business rates freezing and rate relief rebates provided automatically to prevent money going unclaimed.
“In spite of the Government’s assertions money isn't filtering down fast enough to SMEs. The administration and red tape needs to be simplified if the Government is serious in its claims of making access to finance easier in order to get businesses out of trouble.”
The BCA is also keen to see a corporation tax holiday in order to boost the economy. Brooke explains: “The corporate taxation system in the UK is over complicated and not as competitive as other countries and as a result we are losing businesses overseas. The Irish Budget recently held its 12.5% corporation tax rate, one of the lowest in the EU.
“Darling proposed a UK increase to a 22% corpora