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Rates For Small Businesses – a New System is needed

Comment 20th July 2010

We need to change the way Business Rates are applied, as the current system puts small businesses at a sever disadvantage.

Why does this matter?

Business Rates are currently extortionate, and can seriously affect the viability of a small  business which is trying to grow.

My tiny business, run by my wife and myself, with a turnover of about £30K per year, needs a workshop in which to operate.  This we have just acquired, and now we have the pleasure of paying around £3000 per year business rates.  Our annual profit is £12000 if we're lucky, and we work long hours to achieve this.

So a quarter of our pre-tax profit is being paid to the local council as rates.  We receive nothing – absolutely nothing – for this.  No refuse collection, no street lighting, no district council services.  Nothing.

The whole concept of business rates needs to be reassessed.  Perhaps bigger businesses can afford this, but people in our position are struggling, and cannot.

I suggest that a better system of providing this revenue might be to replace the non-domestic rates with a tiered income tax, arranged so that payments increase in line with profits.  Perhaps then small businesses would have a better chance of becoming bigger businesses, when they would be able to give employment to more people.

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