Just one in four ICAEW members able to pay business rates

Just one in four ICAEW members who work in retail, hospitality and leisure sectors said their companies would be able to pay their rates in full at the end of the year-long holiday on 31 March, according to the latest poll.

The survey was conducted between 28 January to 2 February 2021, comprising 298 responses in total (153 from members in business and 145 from members in practice).

The institute claimed that extending the business rates holiday for struggling companies who face a “cliff-edge” in April would be a key measure for the chancellor to announce in the upcoming budget announcement.

As well as highlighting the need for an extension to the rates holiday, ICAEW has also urged “fundamental, longer term’ changes to be made to improve business rates as part of the treasury’s ongoing review of the system.

According to the poll, only 1% of ICAEW chartered accountants who work in practice said all their clients in retail, hospitality and leisure would be able to make payments “in full’ if the rates holiday concludes at the end of March.

A further 40% of respondents revealed that their clients could make the payments with a “negative impact” on their cash flow, 59% stated some of their clients would “not be able” to pay the tax in full.

However, half of respondents claimed they could make the payments but with a negative impact on cash flow, and a quarter said they could make the payments.

John Boulton, technical policy director, ICAEW said: “The chancellor must listen to the calls from hard-pressed companies who cannot afford to make their business rates payments and currently face a cliff-edge in April. These businesses need breathing space until they can re-open and are making money again.

“And as we consider the end of this lockdown, the time is right for a fundamental rethink of business rates, to build a system fit for the high street of the future.”