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The government’s re-evaluation of business rates could help some business, but harm others.

The changes are due to come into effect on April 1st, and several employers groups have written to Prime Minister Theresa May condemning the changes to business rates as “outrageous”.

Business rates currently contribute to 5% of total tax revenue, they’re calculated as a proportion of rent that can be charged on commercial properties, also known as the rateable value.

Some firms in London are expecting their current bills to double, although the current increase is capped at 42% for the first year, in areas that aren’t as wealthy, these figures will fall potentially allowing more businesses to grow.

Since 1990 business rates have increased from a third of rental value to half, this means that England has the highest commercial property tax in the rich world.

One benefit that will come from this is for smaller businesses. Those with a ratable value up to £12,000 will pay nothing; this is roughly equivalent to 600,000 firms. However those over £15,000 (despite the £3000 difference) will pay the full amount, and those in-between will pay a tapered rate.

Proposals have recently been put forward for a change of the current system. These proposals are asking for the measuring of energy rather than property values. John Webber of Colliers said: “It worked pretty well for 400years, until politicians started tinkering with it.”

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