By Alex Klaushofer
In a move welcomed by councils, the government has performed a U-turn on business rates.
Increases in the rates, combined with the end of the 2005 transitional relief scheme, meant that thousands of businesses faced rises of at least 5% from April 1. They will now be able to spread the increases over three years. The decision will allow business ratepayers to defer the payment of around £600m this year.
Chancellor Alistair Darling said: ‘This measure will help businesses to smooth their rates payments over the next few years to deal with the effects of the recent spike in inflation.’
The Local Government Association, which had warned that the sudden rises threatened local businesses’ survival, welcomed the news. Councils collect the business rates, which are set nationally. ‘This will help a large number of businesses struggling in the bleak economic climate,’ said LGA chair Margaret Eaton.
But she added: ‘The end of transitional relief will take away the protection from businesses that have been worst affected and are at danger of going bankrupt, resulting in job losses.’
