Sajid Javid hits back at business rates 'scaremongering'

"Unscrupulous" companies have been accused of trying to scare business owners into thinking their taxes will rise in order to make a profit.

Communities Secretary Sajid Javid said "scaremongering" rating agents are manufacturing reports about business rates going up while "cynically" promising to help firms win an appeal against any increase "in exchange for a hefty fee".

In an article for the Daily Telegraph, Mr Javid said: "Although there will inevitably be winners and losers in a cash-neutral revaluation, we're taking action so the vast majority of businesses do not end up worse off, and to mitigate the impact on those who see their bills rising.

"I grew up above the family shop, and I know for myself that running a business is stressful enough without the Government adding to your worries.

"But the only people who should be concerned about April's changes are the scaremongering ratings agents, who are about to see much of their target audience celebrating a fall in their tax bill."

The minister's comments come amid negative reports about the Government's controversial revaluation of business rates.

Three Conservative MPs based in London and the South East - Mark Field, Bob Neill and Crispin Blunt - have all called for longer or softer transitional arrangements for firms in the capital.

Mr Javid insists the changes will mean that from 1 April thousands of independent shops, small pubs and rural businesses will see their bills fall, while a third of firms will pay no rates at all.

:: Rising business rates close four pubs a day

He said a £6.7bn package of rate relief would lift 600,000 firms out of paying rates, and said three quarters of English businesses will see their rates fall or stay the same.

Mr Javid also dismissed as "simply not true" stories about businesses facing a near £2bn bill because of a rule change giving valuations a "margin of error" which means they only have to be accurate to within 15% to survive an appeal.

Official figures suggest the Treasury could take in an extra £1bn after the revaluation, prompting a backlash from critics.

But the Government has said the predicted extra revenue is the result of growth and new properties coming into the system, and not due to existing ratepayers being charged more.

Mrt Javid has also denied accusations the move amounts to a "stealth tax", insisting the Treasury "won't make one penny more" as a result of the reforms.

Business leaders have urged ministers to reconsider the pending shake-up, amid warnings it could lead to firms closing and staff being laid off.

The Federation of Small Businesses has complained that the system is "increasingly unfair and outdated, with many facing arbitrary hikes in their bills".

Meanwhile, retail expert Mary Portas has warned that the revaluation will "cripple" high street shops in areas where house prices have increased.