Delay on business rates relief causes 'panic' for London firms

Helen Cahill
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Warnings Given As April Business Rate Rise Threatens UK High Streets
There are worries about how business rates changes will affect small firms (Source: Getty)

The distribution of business rates relief has been delayed, causing "panic" for small firms across the capital.

Business rates were revaluated in April and are sky-rocketing for many companies in London.

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In his Spring Budget, chancellor Philip Hammond promised funding of £300m for councils to give to businesses hardest hit by the property tax revalutaion.

However, there are now concerns that businesses are not receiving the relief, despite £25m of the funding set to be distributed this year.

Read more: Javid denies business rates tax grab, says Treasury lost money last time

The London borough of Tower Hamlets has said it is waiting for the government to confirm the regulations around the scheme, and that it will not be able to distribute funds until it receives more guidance, according to business rates specialists CVS.

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said: "Small businesses were given a cast iron guarantee that the General Election would not delay implementation of rates relief initiatives."

Read more: Sainsbury's superstores set for £40m business rates tax cut

He said London boroughs should not be chasing businesses for their oversized property tax bills if they have not yet started distributing the funds from Hammond's relief package.

"FSB calls on government to issue guidance to local authorities that puts a moratorium on pursuing small businesses for these incorrect bills, which would be refunded as soon as a local authority gets its house in order," Cherry said.

Legally, councils are able to change the tax bills of businesses, CVS said. However, local authorities have not had a guarantee that the government will return the money.

Mark Rigby, chief executive of CVS, said: "A common sense approach here is needed. The money to help those most in need is coming from government and there is no reason why revised tax demands shouldn't have been sent out by local councils by now.

"These delays are simply causing panic, confusion and alarm for small firms."

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