The Chancellor Philip Hammond has told Conservative MPs he is “listening” to their concerns about an imminent re-evaluation of business rates.
Rates are being updated for the first time in seven years, to bring them into line with property values.
Business groups and some Tory MPs have warned of high street store closures.
Speaking ahead of next month’s Budget, Mr Hammond stopped short of committing himself to action.
At an 80-minute meeting of the Tory backbench 1922 Committee in Westminster on Monday evening, a series of MPs confronted Mr Hammond with examples of businesses in their constituencies facing steep tax rises.
Business rate concerns genuine – MP
The changes come into force on 1 April as a result of a revaluation of premises carried out by the government.
As a result of the government’s revaluation, ministers say three quarters of businesses’ rates will either go down or stay the same – but ministers have faced calls for a rethink, with claims retailers in some areas could face rises of up to 400%.
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Meanwhile, the Government has dismissed as “nonsense” reports that cabinet ministers underestimated business rate rises by 5-7% in a letter sent to Tory MPs.
The private email, from Local Government Secretary Sajid Javid and Treasury Chief Secretary David Gauke, said: “This year’s revaluation has been preceded by a series of reports claiming that rates are going to soar, that appeals are being banned and that hundreds of thousands of businesses will be forced to close.
“Such claims are simply untrue.”
They insisted that most firms would not see any rise in their bills and attached a list revealing many of the areas facing rate rises are in Tory heartlands, with the Home Counties facing some of the biggest increases.
Business rates explained
- Business rates are a tax on non-residential property such as pubs, restaurants, warehouses, factories, shops and offices
- The amount businesses pay is based on how much annual rent could be charged on the premises, which is known as the rateable value
- This is combined with the “multiplier” – a figure set by the government each year – to determine the final bill
- The Westminster government’s revaluation, the first since 2010, applies to premises in England
- Revaluations are also taking place in Scotland and Wales, and Northern Ireland carried out one in 2015
But according to reports, the figures have been underestimated because they do not take into account inflation or “appeals adjustments”, which the Government adds to its calculations to ensure total revenues do not decline as a result of appeals by firms against rating decisions.
A Department for Communities and Local Government spokesman said: “This latest claim from (rating agent) Gerald Eve is nonsense – we have been clear how our figures are calculated and what they include.
“Councils and businesses can see how the revaluation is making bills fairer and is revenue neutral.
“This is yet more scaremongering, when in reality the revaluation will mean businesses in 80% of council areas will see an average fall in their business rates bills due to revaluation before inflation.”