The Federation of Small Businesses (FSB) is urging Jeremy Hunt to act now to save thousands of pubs, cafes and small shops from sky rocketing business rates bills.
The UK’s largest business group has said: “Government is about choices and the Chancellor must concentrate his firepower where it can do most-good – small firms and the 16 million jobs they support. The prize for getting this right is massive.”
Without action, small firms face a triple whammy of threats:
The so-called ‘small business multiplier’, which is set to slap a whopping inflation-linked increase on ordinary businesses.
The most under pressure high street firms facing a quadrupling of their bills when the 75 per cent retail, hospitality and leisure discount expires in March.
Large firms increasingly leaning on their small suppliers for cashflow by delaying payments.
FSB is calling for urgent and comprehensive action to power the economy, including tackling small businesses rising rates bills; action on late payment; and helping people train to expand their businesses and grow the economy.
Small businesses are considerably more vulnerable than their larger counterparts – 35 per cent of micro-businesses have less than three-months worth of cash reserves, according to the ONS.
Ann Scott, Development Manager for Essex at FSB, said:
“Thousands of pubs, cafes and small shops face sky rocketing business rates bills unless Jeremy Hunt acts at the Autumn Statement. We are at a crossroads for the future of our economy. Real life businesses need a platform to power through troubled times.
“Government is about choices and the Chancellor must concentrate his firepower where it can do the most good – small firms and the 16 million jobs they support. The prize for getting this right is massive.
“Small firms face huge inflation-linked increases to the so-called Small Business Multiplier in April – worse, this is timed to coincide with the scheduled withdrawal of tax support to the high street. Big retailers have already gotten a rates bonus from the last revaluation, but small firms have had an incredibly bruising few years and want to see a hopeful message from Government.
“The Chancellor has built a reputation as a steadying hand, but he and the Prime Minister must now act to secure the prosperity on which future stability depends. As well as urgent action on rates, that means tackling real bread and butter issues blocking small firms from success, like late payment and skills shortages.
“Large businesses, from supermarket giants to huge public sector contractors must stop using their small suppliers as cash cows. Training must be encouraged, not penalised, by HMRC. The Chancellor has a chance to build long-term prosperity as well as shore up our economic defences.
“Politicians must take care they look beyond big city boardrooms and act to also create growth in the real economy. Labour as well as the Conservatives must show they are serious about policies relevant to small business decisions. This is not about politics – no one should want a General Election fought in the hollowed-out high streets.
“The Autumn Statement is the key moment for Parliament to stand up for the small firms across the country who work hard, pay a fortune in taxes, and provide the jobs our communities need. Small firms will be watching and hoping that the Chancellor delivers what the country needs. Jeremy Hunt must seize the moment.
“The prize if the Chancellor gets this right is massive. Small businesses have an amazing capacity to grow, expand and generate the increases in living standards that everyone across our country needs. Combining stability with prosperity is the key. The UK economy has proved time and time again that it is resilient. With the right Government approach, we cannot just get through difficult times, but secure a positive more prosperous future for all of our local communities and the businesses that make them what they are.”
Rob Ely, Co-Founder and Director of TOAST, who have five coffee shops in Essex, added: “The current Business Rates Relief scheme plays a crucial role for us – it’s the difference between profitability and non-profitability. It’s as simple as that. Several of our branches would struggle to thrive without the scheme due to tight profit margins. We are consistently navigating the delicate balance between maintaining the quality of our products and being competitive price wise, within the marketplace. We’ve always positioned ourselves as the most affordable high-quality coffee chain on the high street, being committed to not compromising on quality or raising prices. The Business Rates Relief scheme enables us to uphold these principles. Without it, we’ll have to make some very tough decisions.”
