NHBF presses government ahead of Budget for ‘fundamental’ reform of business rates

The NHBF has written to chancellor Philip Hammond and communities secretary Sajid Javid urging them to listen to the concerns of small businesses about the impact of next month’s changes to business rates.

The government is coming under increasing pressure to outline measures in the Budget next week (March 8) to soften the revaluation of business rates. This is due to take effect from April, and could mean many salons and barber shops will see their business rates bill rising sharply.

Despite government assurances that only a minority of businesses will find their rates going up, an NHBF survey of members has found that almost half (42%) of hair and beauty salons and barber shops are expecting to be hit by a higher bill from April, especially in places where property prices have risen steeply in recent years. Earlier this month, for example, the Vidal Sassoon chain warned that rates in its four London salons would be rising by 18%.

In her letter, NHBF chief executive Hilary Hall said: “Business rates are already a major cost for business owners, in many cases far exceeding the cost of rents. The system also deters business owners from investing in their property, for example, by installing air conditioning, as this will often result in higher business rates bills. This is further evidence that the current system fails to work.”

As well as short-term measures, the NHBF is calling on the government to carry out a “fundamental” review of business rates to create a fairer taxation system. The fact business rates are based on physical premises means businesses such as salons have to be on a high street. But high street businesses are left at a disadvantage compared to the rates paid by big online or out-of-town retailers, it has argued.

“The valuation system has become too complicated, with many appeals clogging up the system. Instead of reducing the opportunities for appeal, we would like to see small high street businesses removed from the business rates system altogether,” said Hilary. The NHBF has therefore launched a new ‘no savings, no fee’ appeals service from a specialist rating survey to help members who feel their bill is wrong. View more information here.

One NHBF member whose bill will be rising sharply is Richard Stone, of Studio One in Godalming, Surrey, who said:

“I would like some clear guidance on how it is calculated. For example, we have an air conditioning unit which we use as a heater in the winter and to cool the air in the summer. That’s included in our rateable value. Why? I don’t mind paying a fair amount, but at the moment I just feel we’re being ripped off. Our staff already all work really hard, and you can only try to improve. But it is going to be a massive increase,” he added.

The NHBF is also urging salons to lobby their MPs to raise the issue in Parliament. To that end, the NHBF has been working with Bedford Conservative MP Richard Fuller, who has pledged to raise the need for “radical change” with the chancellor.