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Press Release: 18.01.09

18th January 2009

Alarm over business rates threat


Local Tory Parliamentary Candidate, Gordon Henderson, has expressed alarm at news the Government is to further increase Swale’s business rates at a time of economic recession and has accused them of kicking Swale’s business leaders and workers “in the teeth”.

The Government is introducing a new law - the Business Rates Supplements Bill - which will force Kent & Swale to increase business rates on local firms by levying a ‘supplementary’ rate on top of current bills. This comes at a time that business rates are already due to rise in April due to reductions in Government grants, inflation and a further reductions in the Small Business Rate Relief.

1. In 2008/9 there were 3718 businesses in Swale paying an average bill of £8164, which raised £30.4 million a year in tax from local firms for the Exchequer.

2. Due to the impending 5% rise in national average business rate bills firms in Swale will pay an average of £8573 from April. If a supplementary business rate were imposed on top, this could push the average bill on local firms to a record £8941 a year. With the further reduction in Small Business Rate Relief also due this year many local firms in Swale could pay considerably more.

3. A Supplementary Business Rates will be used to fund local authorities’ current expenditure, rather than new infrastructure. Councils will be pressured into levying supplementary business rates to make up for funding reductions from Central Government. Firms will not be given a proper vote on whether or not they support the new charge. According to the Government, supplementary business rates could increase taxes by up to £600 million a year if levied by every local authority.

4. There will also be a business rates revaluation in 2010, which may increase the bills even more for many firms – especially shops, since retail property rents have risen sharply in recent years. Higher rateable values will worsen the impact of supplementary rates as will the recent withdrawal of relief on empty premises now forced to pay 100% Rates even when they have no income.

Mr Henderson said:
‘I might be a cynic, but I fear that the Government will reduce its central grant to Kent County Council and Swale Borough Council, forcing them to use supplementary business rates to balance the books. This is just another backdoor way for Gordon Brown to hike taxes by stealth, whilst at the same time blaming local authorities for any increase.

‘At a time when local firms are struggling for their very survival imposing higher business rates on them would be a triple whammy for businesses and workers. It is a real kick in the teeth for Swale’s economy and could force more firms to close and make workers redundant.’

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