Critics of the government’s planned changes to business rates are raising “genuine” concerns, a former local government minister says.
Bob Neill was speaking after ministers claimed there had been a “relentless campaign of distortions and half-truths” about the move.
The changes come into force on 1 April as a result of a revaluation of premises carried out by the government.
Business groups and some Tory MPs have warned of high street store closures.
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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%.
In a letter to Conservative MPs, 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.”
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
The ministers said 2017-18 “will see the biggest ever cut in business rates” and “three-quarters of all businesses, right across the country, will see their rates either fall or stay the same”.
They said the “misinformation circulating in the news” meant it was “understandable that business owners and lobby groups have raised concerns with many of you”, but they insisted the changes coming into effect in April were “not something to be afraid of”.
But speaking on BBC Radio 4’s The World at One, Mr Neill, the Conservative MP for the South London constituency of Bromley and Chislehurst, said the government had “swallowed a line” from the Valuation Office Agency, the organisation that handles property valuations relating to tax changes, which was “wholly out of touch”.
He said high street shops in London and the South East would be particularly badly-hit, adding: “I think that the concern is genuine and there are sensible things that the government can do to address this.”
Mr Neill said the “cliff edge” system should be replaced by a sliding scale and that businesses should be given more time to adapt.