Small Talk: Osborne prolongs the great business rates robbery

All Chancellors give with one hand only to take with another – that's the job – but for far too many small businesses, George Osborne's Autumn Statement only prolongs the agony. For all the talk of targeted help for small businesses, the great business rates robbery will continue.

It's true that a minority of the smallest businesses will now benefit from small business rate relief for longer than previously expected – the doubling up of relief will now stay in place until April 2014, rather than expiring in a few months' time. But that won't help most small businesses because they're too large to benefit from the relief.

The total number of properties in England (different rules on business rates apply elsewhere in the UK) eligible to pay business rates is 1.8 million, and their average rateable value is £32,000. On that basis, the £12,000 cap on business rates relief looks pretty stingey – particularly given that a small business is officially defined as any business in a property with a total rateable value of £18,000 or less.

In fact, around half a million small businesses are theoretically entitled to claim this relief. In practice, many won't get the benefit because it has to be applied for, despite repeated promises to make payment automatic. Take-up rates in previous years have typically run at around 50 per cent.

Bear in mind too that only businesses in properties with a rateable value below £6,000 are entitled to claim the maximum level of relief (50 per cent, or 100 per cent for as long as doubling up continues). Those in businesses with rateable values between £6,000 and £12,000 lose their relief on a sliding scale.

Business rates are expensive for all businesses, of course, but for small and medium-sized enterprises, they account for a much more significant proportion of outgoings – in many cases, they're the third biggest bill paid by an SME each year.

Moreover, Britain collects more money from taxes on business premises than almost any other Western country – roughly three times as much as Germany, for example.

Indeed, businesses are still reeling from the swingeing increase in rates introduced in April, when the Government raised bills by 5.6 per cent. Their bills will go up again in April 2013, by another 2.6 per cent, assuming the Government links the increase to the rate of RPI inflation in the previous September.

Some of the damage will be mitigated by corporation tax cuts, but these are small beer in comparison to the business rate rises that SMEs have been paying. In one poll earlier this year, 52 per cent of SMEs said they'd rather lose their corporation tax increase than pay the April business rate hike.

Other tax incentives aimed at SMEs are also outweighed by the effect of business rate increases. The result is that the growth the Chancellor hopes to achieve with such incentives, particularly in employment, is unlikely to be achieved.

To make matters worse, many SMEs feel that business rates are unfair and becoming more so. They're not calculated according to ability to pay – they penalise businesses that need larger premises to operate from, so manufacturers and retailers tend to get hit with especially large bills. And while it's quite right that businesses make a contribution towards the cost of the services provided by the local authorities where they operate, which is what business rates are for, they share the burden with council taxpayers. And council tax bills have been frozen – not least for political reasons – so businesses' share of the bill has been rising.

Had the Chancellor really wanted to help SMEs in the Autumn Statement, business rates should have been a much bigger priority – starting with a sizeable increase in the cap on the rateable value of premises that qualify for relief.

Electronic receipts could end till rolls

Coming soon to a supermarket near you: electronic receipts that will do away with the need for all those till rolls. Paperless Receipts, set up by last year with backing from investors including former Tesco boss Lord MacLaurin, has raised another £1.2m of funding and reckons it will be rolling out its technology in the new year. The idea is that shops would issue electronic receipts at the check-out, with customers getting their paperwork via online accounts stored in a secure cloud-based system.

Hiking gear maker is on the move

The Alternative Investment Market continues to prove popular with developing economy countries looking to tap international finance. Camkids, a Chinese manufacturer of outdoor clothing, footwear and equipment, will today announce its IPO on Aim – the company is raising around £6m from investors and expects to have a market capitalisation of £65m.

Camkids specifically targets the children's market in China, with products aimed at the outdoor pursuits market – hiking, mountain biking and camping, for example – rather than sports sectors such as football or basketball. It's the second largest player in this market in China (behind Nike), which analysts are expecting to grow at 17 per cent a year over the next five years.

Unlike some Aim flotations, Camkids also comes to market with a record of trading profitably and paying dividends. In 2011, the business made a post-tax profit of £16m on sales of £74m.

Small Business Man of the Week: Antony Ceravolo, founder, ECNlive

We provide digital displays in offices across London – and now France and Germany too – that enable companies to communicate with their employees and people coming into the building. We basically replace the sort of roll-up banners many companies have installed in their foyers, or those TVs you see with the sound turned down.

"It sounds quite mundane, but this can be a really powerful platform. It can be used to communicate something as simple as fire drill instructions or much more interesting things like charity appeals. We're going to be working with social media groups too and we already have advertisers such as British Airways and IBM using the system to target special offers at office workers.

"I've got an investment banking background and I've spent some time working in online media and retail – I was one of the founders of LoveFilm – and during some travelling in Asia I saw a lot of Chinese businesses with systems like this. On my return to London in 2009, I founded ECN and we began talking to property companies. It took a while to get them to see the benefits, but now we're in 150 offices, including Canary Wharf and the Gherkin.

Start your day with The Independent, sign up for daily news emails
News
i100
News
Bobbi Kristina Brown, daughter of the late singer Whitney Houston, poses at the premiere of
people
News
people
News
The frequency with which we lie and our ability to get away with it both increase to young adulthood then decline with age, possibly because of changes that occur in the brain
scienceRoger Dobson knows the true story, from Pinocchio to Pollard
Voices
The male menopause: those affected can suffer hot flushes, night sweats, joint pain, low libido, depression and an increase in body fat, among other symptoms
voicesSo the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Life and Style
health
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen