The majority of SMEs in the UK would favour a system for business rates that is simpler and more flexible, according to new research.
A report from Close Brothers Asset Finance found that 71% of SMEs wanted a simpler system with larger businesses feeling particularly frustrated.
Business rates are a tax on business properties set by the government; they are collected by local authorities and are the way that those who occupy non-domestic property contribute towards the cost of local services.
Neil Davies, CEO at Close Brothers Asset Finance, commented: “According to the latest advice, business rates are worked out based on a property’s ‘rateable value’, which is its open market rental value, which is in turn based on an estimate by the Valuation Office Agency.
“Rates can be estimated by multiplying the rateable value by the correct ‘multiplier’; an amount set by central government.”
51% of those polled felt that the rates they pay are ‘just right’ against 32% who felt they were ‘too expensive’, which is consistent across regions, industries and business size.
In addition, more businesses (44%) felt they were getting value for money compared to those who feel they are not (39%).
There is a strong sense that not enough is being done to assist businesses with rate relief, which is handled differently in England, Scotland, Wales and Northern Ireland, reported the firm.
Mr Davies added: “Steps are being taken, as demonstrated by an initiative that’s been in place from 1st April 2017 that saw 100% relief, doubled from the usual rate of 50%, for properties with a rateable value of £12,000 or less.
“That said, the message from SMEs is clear that more needs to done.”
Rates have been rising steadily in most regions over the past two years with nearly one in 10 saying they’ve risen ‘steeply’.
Yorkshire, London, South West and Scotland experienced above the UK average rises while only 2% of SMEs have seen a decline, with the West Midlands at 7% the only region above the national sentiment.