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Business rates: Senior councillor at Kent County Council questions 'viability' of reforms on KMTV show Chris & Co

By Chris Price

One of Kent’s most senior councillors has raised concerns that impending reforms to business rates will take large businesses away from the county.

Changes to the way rates are calculated, which come into effect in April, could leave Kent in the same position it faced when Pfizer announced plans to close its site in Sandwich in 2011, according to Cllr Mark Dance.

The reforms – based on more recent property prices – will mean rates increase in more than 800 towns and villages across the UK, with some firms facing increases of 42%.

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Shops on Whitstable High Street will face changes to business rates
Shops on Whitstable High Street will face changes to business rates

A small shop in Rochester High Street will see the tax increase by £455 but it will also lead to decreases in other areas, with an equivalent firm in Margate paying £93 less.

Cllr Dance, who is cabinet member for economic development at Kent County Council, pointed to the Pfizer’s decision to scale back in its research and development operations in 2011, which put 2,400 jobs at risk.

It has since become the business estate Discovery Park, which is home to 150 companies.

Speaking on KMTV business show Chris & Co, he said: “We recovered from that situation but it has taken us 10 years. We don’t want that happening again because of business rates and a very hard escalator.

“For small businesses their payments will go up incrementally. For large business it can go up by 42%. That is huge. Where’s the viability?

Cllr Mark Dance
Cllr Mark Dance

“You have got the minimum wage increases coming in slowly as a higher cost – quite rightly in my view – but you have got to add up whether those businesses can survive in the high street.”

Cllr Dance called for a “smoother escalator” for large businesses when reforming business rates.

The changes will be beneficial to many small firms operating on smaller premises.

Small business rate relief on the tax will be permanently doubled from 50% to 100% from April.

At the same time the Government will increase the number of firms able to claim small business rate relief by doubling the threshold. It will apply to companies operating on a site with a rateable value of £12,000, up from £6,000, with tapered relief up to £15,000. This also comes at a time when Government is cutting corporation tax.

Cllr Dance added: “We feel we have supported small business but my main concern still is the big high street names and the bigger businesses.

“It’s a very complex system, it needs an overhaul and we’re watching like a hawk because it will be our income to cover the cost of the services we have to provide by statute, like elderly care and education.

“It is in everyone’s interest that this formula works.”

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