As ministers prepare to address Mary Portas’s damning report of the British high street, and the ACS (Assoc. Convenience Stores) launches a campaign against the business rates increase in April, experts are calling for the Government to revise other current policies which they say are stifling economic growth.

Recent reforms, such as rate relief for small businesses and changes to empty space relief are stunting business growth, rather than encouraging it, says Sarah Davey, who has held senior positions within the VOA (Valuation Office Agency) and is now head of business rates consultancy Ruddle Merz London.

“The extension of rates relief for small businesses applies to less than one per cent of the smallest businesses in the UK,” she said. “If any of those businesses start to grow they then find themselves hit with a huge rates bill, so as soon as they start to prosper, they are penalised for it.

“Small businesses actually managing to grow in the current economy are the key to reviving it. The Government needs to build a more supportive system which fosters the growth of small businesses, not stifles it.”

Two other Government initiatives called into question are the recent rates deferral scheme and the revision of empty space policy.

Sarah Davey also said: “Theoretically, rates deferment aims to help businesses hit hardest by the economic downturn, but all it does is simply give them the option to put off the inevitable.

“Those that take up the offer because they cannot afford to pay their rates bill will simply get a much bigger one further down the line, when there’s no guarantee that their finances will be in better shape.”.

Empty space relief for empty business space was reduced in 2008 to just three months for office premises and six months for industrial premises and has seen the government subsequently collect an extra £1 billion in rates.

She added: “Initially we were told that the shift in legislation on empty space was to stop new buildings standing vacant, but we now have more empty shops and offices that ever, and the revised policy is making things worse.

“The previous empty rates relief system, whereby businesses rates bills were halved until occupied encouraged property investment, development, and acquisition – something that is desperately needed to jump-start the economy. The system we now have penalises those speculating and investing in property, which has a knock-on effect on numerous different industries.

“Following Mary Portas’s recommendations, the Government is about to set wheels in motion that will affect every business in the country. We can only hope that they consider the long term future of the British economy before the Government’s short term financial goals”.

Business Rates – small business rate relief scheme extendedThe small business rate relief scheme was due to end on 30 September 2011, but has now been extended for an additional year. The scheme provides eligible small business ratepayers with small business rate relief at 100 per cent on properties up to £6,000 rateable value in 2010, (rather than the previous rate of 50 per cent), and a tapering relief from 100 per cent to 0 per cent for properties up to £12,000 in rateable value.

RICS wrote to Bob Neill MP, Communities and Local Government Minister, in November 2010 to highlight the negative impact that proposals to cut Empty Property Rate Relief in April 2011 will have on future development.

Currently, businesses with empty property of a rateable value less than £18,000 do not have to pay empty property business rates, a measure bought in by the previous Government. However, the threshold will be cut to £2,600 in April.

The Government estimate that this will save the public purse £400million in 2011/12. However, RICS is concerned that the impact on local business and development will be far greater. RICS recognises the need to reduce public expenditure and asked the Minister to consider making Empty Property Rate Relief available for 12 or 18 months before full business rates become payable.

RICS suggested other measures the Government could introduce, including retaining the empty property exemption for listed buildings, exempting companies in administration from business rates and delaying the introduction of anti-avoidance regulations.

RICS was the first organisation to highlight potential problems with empty property rates to MPs in May 2007 and produced the first major piece of evidence on the impact of changes to Empty Property Rates with Lambert Smith Hampton. RICS has continued work closely with MPs and the national and trade press on this issue and made representations to the Treasury on EPR as part of our 2008 Pre-Budget Report submission.

In his response to RICS, the Minister highlighted the measures the Government has already taken including doubling small business rate relief for one year and the waiving of £175million of backdated business rates in the Localism Bill. Unfortunately, the Government believes that support for Empty Property Rate Relief for 2011/12 is unaffordable. The Minister will be keeping the matter under review and RICS will continue to monitor the issue.

The forthcoming Local Government Resource Review will take forward proposals to enable councils to retain locally-raised business rates. RICS look forward to working with members and Government on these proposals.

56% of businesses in Thurrock, Essex have failed to claim small business rate relief  leaving £433,000 with the Chancellor of the Exchequer the Federation of Small Businesses has said. The money not claimed dates back as far to April 2007 and these business only have until Thursday 30th September to make a claim.

The spokesman for the Thurrock FSB Ross Bannister has said ”

“A survey from Leaseholders United published this week shows that 56 per cent of businesses in Thurrock entitled to claim Small Business Rate Relief have failed to do so.

“That is one of the highest levels of unclaimed rate relief of any council in Essex and places Thurrock in 41st place nationally out of 303 local councils in a league table where being near the top is bad news for local businesses!

“This means Thurrock has one of the highest proportions of unclaimed rate relief of any council in Essex which is not good news and we want those remaining 906 businesses to get their relief too.

“Between them those businesses are handing back to the Chancellor of the Exchequer a staggering £433,359 – money which we believe would be far better spent supporting the Thurrock economy which is why we are encouraging them to make their claim today.

“Small Business Rate Relief is available for firms in premises with a rateable value below £18,000 and can mean a saving of up to half their business rates which is a considerable sum.

“That saving can be claimed at any time for the current year but if firms wish to claim back as far as 01 April 2007 they must do so before the deadline of Thursday 30 September 2010.

“The claim form is one of the simplest produced by Government and is one side of A4 to complete with basic questions about the premises a business occupies so 15 minutes completing that form could earn a business up to £3,000!

“More details and application forms are available from the local council or can be downloaded at www.businessraterelief.co.uk “