Business Rates

Business rates are a compulsory tax that any company occupying a non-domestic property has to pay. Business rates are based on a property’s size, and so small companies that need a large space, like manufacturing companies, are often penalised with a large business rate bill. On the other hand, large companies with small office spaces, such as those which mainly operate online, will pay comparatively lower business rates. This government has introduced a number of measures to try to mitigate the problem of excessive rates, including offering a £1,000 discount to small retailers. Additionally the Localism Act 2011 gave local authorities the power to offer unlimited ‘discretionary relief’ to any business. For over two decades they have also had the power to offer hardship relief to any business which has experienced unexpected difficulties, such as a flood or fire.

However, when Margot investigated how local authorities were using their powers to reduce business rates, she discovered that only 1 in 10 councils had used them at all. Margot sent Freedom of Information requests to every local authority in the country questioning their use of these powers, and she received 191 responses. Of these, only 23 said they had offered discounts, whereas 168 never had. Margot has continuously called for authorities to use the powers they already have to help regenerate town centres and support small companies. Since Margot’s investigation, George Osborne has announced that there will a ‘full structural’ review of the business rates system.