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Business Rate Deferment to miss April 2012 increase

26 January 2012

The Department for Communities & Local Government has announced that the Chancellor's deferment of the rise in business rates will not be available in time for the April 2012 increase.

The u-turn comes despite the Chancellor saying in his Autumn Statement that businesses would be allowed to defer 60% of the increase in their 2012-2013 business rate bills to the two following years. But the DCLG now says that local authorities will have to charge the full amount because the scheme won't be launched in time for the April increase.

Sarah Davey, Head of Ruddle Merz London, commented: "Although this may be a blow for some businesses hoping to put off the increase in rates, deferment is complicated and doesn't solve the problem.  It just puts off the inevitable and lands businesses with a much larger bill further down the line, when they may be in an even worse financial position than they were before."

"One of the most obvious ways in which the Government can assist businesses and encourage economic growth seems to have been missed - empty rate relief. The system overhaul in 2008 which saw empty rate relief reduced has seen the government subsequently collect an extra £1 billion in rates."

"The previous empty rates relief system, whereby businesses rates bills were halved, encouraged property investment, development, and acquisition, which is something that is desperately needed to jump-start the economy."

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