Kirsty and Roger call for a rethink on business rates

9.39.32am GMT Mon 2nd Nov 2009

As local businesses face excessive increases in business rates, Kirsty Williams AM and Roger Williams MP, representatives for Brecon and Radnorshire, have called upon the Assembly Government to revise the unfair way in which the rates are to be calculated.

Taking forward the concerns of local businesses and chamber of trade organisations the Welsh Lib Dem parliamentarians have called upon the Minister to rethink plans to base 2010's business rates on last April's revaluation, which will severely harm local businesses. 2009's rates are based on property valuations from 2003, next years will be based on April 2008 valuations. Throughout this period we not only had a more robust economy but also a booming housing market, but no adjustment has been to business rates to reflect the subsequent sharp downturn.

Kirsty Williams said: "At a time when the economic downturn, excessive red tape and rising bills and rates are drowning our local businesses the Welsh Government must do more to support them - by looking again at the proposed business rate increases and by providing more business rate relief.

"Business rates are the third biggest expense for most businesses, for a business with a turnover of less than £50,000, business rates can be equivalent to over a third of their profits. A further increase in the threshold for small businesses would provide an immense boost for the many small businesses across Wales struggling to survive. When cashflow is crucial to the survival of businesses, such a scheme could be essential to saving business and jobs and encouraging entrepreneurialism.

Roger Williams commented: "After raising concerns with the Minister that using the multiplier based on the Retail Price Index (RPI) in September 2008 would cause businesses this year problems the Government announced that it would be phasing the payments of the increase over 3 years. But any advantage from this reduction in the multiplier calculation for September 2009 will be outweighed by the April 2008 revaluation increase. Since April 2008 much has changed - we have seen a devastating slump in the housing market and in the economy and next year's rates must be altered to reflect this.

"Areas such as Brecon which traditionally have high business rates will be at a particular disadvantage.

"In other parts of the UK a transitional period is to be put in place, in Northern Ireland the revaluation exercise will be postponed until at least April 2011 and we believe that the Welsh Government must do the same here in Wales. It is unacceptable that whilst other Ministers' across the UK are making alterations to assist businesses, here in Wales nothing is being done to soften the blow "

Notes

The Valuation Office Agency carries out a revaluation of all rateable values of businesses in England and Wales every five years. The next revaluation is due to come into effect on April 1, 2010. All properties will have their rateable value assessed on the valuation date of April 1, 2008.