Half a million companies will start paying higher business rates today without knowing whether they can benefit from a new £300 million relief package.
Restaurants, high street shops and businesses in the South East and London are among those worst affected by the first revaluation in seven years.
Some firms face a rise of around 50 per cent in the business tax and will have just 14 days to pay their first monthly installment.
However a new support fund announced by the Chancellor last month is not yet up and running and businesses do not know if they will be able to benefit.
A consultation on how the scheme will work has not been completed and each council will be free to decide for themselves who can be given financial support.
Experts expressed "huge concern" that businesses could be left in uncertainty for months because the scheme may not be fully operational until the summer.
We could be well into the summer before businesses learn what share of the pie, if any, they will be granted
Government sources last night defended the fund by saying it was only announced last month and indicating ministers want it ready by the end of April.
Jerry Schurder, head of business rates at Gerald Eve, said: “Whilst the package of measures announced in the Budget will eventually bring benefit to some businesses, the current uncertainty as to who will qualify and to what extent, is of huge concern.
“Rates bills landing on doormats now do not include any of the new reliefs and demand payment of the first monthly instalment within the next few days.
“In the meantime, Government is still consulting as to how the £300m discretionary relief fund will be divvied up amongst councils. Only once it has made decisions and advised local authorities as to the categories of business Government believes should be considered for relief will the process begin.”
“Councils will have to devise their own guidance as to which of their local businesses might qualify, programme their billing systems, create application procedures and put in place resources to manage what could well be a torrent of applications for these discretionary reliefs. We could be well into the summer before businesses learn what share of the pie, if any, they will be granted.”
Today business rates – a tax that companies pay based on the rentable value of their properties – will change for the first time in seven years.
The Treasury says the revaluation is revenue neutral, with parts of the country where houses prices have risen paying higher bills and vice versa.
Some 510,000 businesses will see an increase in their business rates, 420,000 will pay the same and 920,000 will see a decrease according to Government released estimates earlier this year.
Ministers came under intense pressure before the Budget to support those worst affected who faced their rates doubling or tripling because of soaring house prices.
Philip Hammond, the Chancellor, announced three measures of support last month. Small firms facing the largest rates were offered extra support, while 90 per cent of pubs were given a £1,000 discount on their 2017 bills.
The third measure – and the most expensive to the Government – was a £300 million fund for firms facing rises that would be handed out by councils.
However critics have said that companies being forced to pay increased bills today have no idea about whether they will be able to get the financial help
A consultation on the rules will only end next Friday – days after the new bills dropped on doormats.
Each council can also choose its own rules for who gets the funds, leaving business facing uncertainty in the coming months according to experts.
Mike Cherry, national chairman of the Federation of Small Businesses, said: “The promise of a £300m relief fund for local authorities to help those hardest hit is welcome. But we urge councils to make small firms aware of their allocation and finalise the mechanism for distributing it as soon as possible.
“What we have to remember is that bills have already landed. That being the case, any firm that pays their full business rates without realising they qualify for relief should have their overpayment returned automatically, and swiftly.”
“Our research shows that over half of small businesses experiencing an increase expect profits to fall. One in five may ultimately consider closing down or selling their business as a result of their new valuation.”
A Government source that in total a £6.7 billion package is in place to help businesses with the revaluation and said it is hoped the £300 million fund will be available “as soon as possible”.
A Government spokesman: “We’ve listened to the concerns of businesses and are giving an extra £435 million to help those facing the steepest increases in their bills.
"Working with local authorities, we’re making sure this extra support gets to businesses as soon as possible.”