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Freeze business rates for two years Chancellor told

By BHawes  |  Posted: November 19, 2013

Phil Smith of Business West
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By Bev Hawes

Businesses are at "boiling point" over spiralling rate bills and are demanding reform.

That is the message from the region's business leaders to the Chancellor George Osborne ahead of his Autumn Statement on December 5.

Today they called for an immediate two-year freeze on "iniquitous" business rates and "root and branch" changes to the present system.

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Phil Smith, managing director of support organisation Business West, said: "There is no question that the business rates system is broken.

 "This is a tax that hits companies of all sizes long before they a make profit, and acts as a drag on business growth and investment.

 "Firms across the UK have been crying out for relief from these burdensome taxes for years but, so far, their pleas have been ignored.

"It is cynical to freeze council tax while allowing the pain caused by business rates to continue, and goes against pro-business pledges made by the Government."

Mr Smith said the cost of spiralling business rate bills was without a doubt the most commonly cited issue facing firms' ability to grow.

"We have just seen that RPI inflation dropped off in October after a spike in September," he said. "But it is the higher figure used to determine the additional tax that businesses pay. Now, firms across the country have reached boiling point, and demand action to reform the system as a whole.

"The Chancellor should use the Autumn Statement to announce a two-year freeze on business rates, along with a root and branch reform of the entire system.

"We need a new framework that is more flexible, transparent and responsive to changes in the economic environment.

"We know this costs money, but there is scope to do it within the Government's fiscal plan.

"That way, businesses can put more money into driving economic growth, which benefits UK plc far more than the cost to the Treasury."

Business West is part of the British Chambers of Commerce, which says:

Business rates aggravate an already uncertain business cashflow and imposes hefty new costs.

Up-rating is unsustainable.

Businesses face paying extra £900m because of inflation link.

Business rates at odds with Government's pro-business rhetoric.

UK firms face highest business rates in Europe.

Continued pressure on business cashflow can impact firms' decision to export.

Visit www.businesswest.co.uk

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