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Business rates "most despised commercial tax"

Business rates are the "most despised commercial tax" among SMEs, with more than nine out of ten saying charges are too high and two-thirds claiming they see no benefit from the money they pay, a new poll has found.

The survey of members of the Forum of Private Business (FPB) showed that 28 per cent believe the fairness of the tax system as a whole has deteriorated under the Coalition, while a quarter felt dealing with tax had become more complex and 26 per cent said that the efficiency of the system has declined.

Only 17 per cent thought the fairness of the tax system had improved, while 14 per cent said that it had been simplified. Only one in ten thought the efficiency of HM Revenue & Customs had improved under the Coalition - a point the FPB said would raise concerns about the agency's ability to handle the "huge change" of Real Time Information for payroll.

Phil Orford, chief executive of the FPB, said, "It's probably fair to say that business rates are the most despised of all commercial taxes by today's small business owner in the UK.

"It's a crippling tax that business owners simply have no choice but to pay and for many who claim to see no discernible benefit to having paid up, it clearly sticks in their craw.

"While there's no doubt that businesses should pay their way for services such as bin collections and for roads to be properly maintained, many feel their hard-earned cash is not being spent wisely, or certainly not for their advantage or benefit. It's evident that business rates are increasingly being viewed as a crude lever to extract cash from hard working entrepreneurs, much of which they'll never see again.

"This research shows George Osborne really has to consider - and seriously - making a credible concession to small business in the Budget on this moot point. Businesses are clearly unhappy about the spiralling costs of [non-domestic rates] and we think the tipping point is about to arrive, if it hasn't already.

"If rates keep charging upwards then businesses are going to go bust - it's as simple as that."

Business rates are set to increase by 2.6 per cent in April.

By Andy Jowett

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