A PEEL business is fighting the government after a decision saw its business rates more than double.
The owners of Auto Mirage, on Peel Hall Business Park, Peel Road, say the decision to raise its rates from £6,300 per year – with rate relief available – to £12,000 with no relief – threaten the very future of the firm.
Managing director Terry Whiteman said: “The increase is staggering and bears no relation to the services or benefits we have access to.
“We have seen our rateable value increase which means we are no longer eligible for the relief small firms can access. Increasing from £191 per month to £480 per month is crazy, especially when you consider we are the same firm we were two years ago.”
The vast increase means the firm can just about get by – but the rise means it can no longer consider offering an apprenticeship, or look at taking on new staff in the near future.
Mr Whiteman added: “We can’t pass these costs on to customers when the economy is struggling, we can only absorb it, which is going to be a huge struggle.
“The government is asking small businesses to employ people and take on apprentices.
“We could have done that if the business had been allowed room to grow.”
Paul Foster, development manager at the Blackpool-based Federation of Small Businesses believes that the system is flawed and needs reviewing.
He said: “Business Rates are the only tax not related to the ability to pay and place a disproportionate burden on small businesses.
“Something is seriously wrong when increases like this can come in and threaten a business’ very existence.”
The organisation has taken the Whitemans’ plight to the Government, who set the rates arbitrarily. Local authorities have no say on the level of business rates.
Appeals can be made over the level of rates set and are decided by an ombudsman, but the success rate for business owners is low.
At a time when small businesses are being lauded as the vehicle to boost growth in the economy, the FSB says firms are being held back by an, “overly-complex and bureaucratic,” system.
One of the problems with the current system is that it is extremely difficult for businesses to understand why valuations have changed so dramatically in such a short space of time.
Whereas local authorities can freeze council tax levels, for some small businesses, changes in the calculations of rateable value have seen significant increases in costs at the time when they can least be afforded.