Treasury minister David Gauke said it was right to update bills in line with rising property values, that only a quarter of firms would see their payments rise this year and that they would get help to adjust.
Chancellor Philip Hammond, who delivers his Budget next month, faces intensifying pressure to back down.
Conservative MPs have joined calls for change to help firms cope with the impact of revaluation, while there is also anger that the system forces small high street shops to pay more for their premises than online retail giants do for their vast warehouses.
Minister David Gauke defended a controversial shake up of business rates
Mary “Queen of Shops” Portas – the retail expert who has advised the government on rejuvenating high streets – today said it was “the single biggest blow to independent shops since the financial crisis” and she feared at least a third of them would be killed off.
Business rates are the commercial equivalent of council tax.
They are based on the assessed rental value of the firm’s property, depending on the exact size and what it is used for. Those valued at under £12,000 pay nothing, then there is a tapering system up to £15,000 after which firms must pay the full amount.
The first rise for seven years will see them paying up to 42 per cent extra in the financial year starting on April 1, well over triple the previous 12.5 per cent cap on annual increases.
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Researchers forecast bills will rise by as much as 400 per cent over the next five years.
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It is right that we bring business rates values up to date to reflect current rental values
David Gauke, Treasury Minister
As well as shops, pubs and other businesses, hospitals, GP surgeries and schools face paying millions of pounds more.
The Government is also under attack for planning to stop appeals against new bills, even when owners can show they are too high, if the calculation is “within the bounds of reasonable professional judgment”.
An alliance of 17 trade bodies and 10 private firms, has written to the Government pleading for a rethink of the “unjust” appeals reform. They include the British Retail Consortium (BRC), the Confederation of British Industry and the Federation of Small Businesses.
Tory MPs faced calls to help firms cope with revaluation
Helen Dickinson, BRC chief executive, said: “Given the growing burden of business rates, it is essential that each ratepayer pays its fair share.
“However, the plans for the new appeals process would mean that a business rates valuation determined to be inaccurate by the independent Valuation Tribunal for England would only be corrected if it is deemed ‘outside the bounds of reasonable professional judgment’.
“This would be unfair to ratepayers and create additional uncertainty for local government.”
Mr Gauke insisted: “It is right that we bring business rates values up to date to reflect current rental values.
Mr Gauke insisted it is right business rates are brought up
“It is also right that there is transitional support for the one in four businesses that are seeing an increase in their business rates and we have got a £3.6million transitional package to smooth that increase."
He defended the crackdown on appeals, saying the aim was to weed out speculative claims that were “clogging up the system” for those with clear cases.
Mr Gauke – famed at Westminster as the man the Treasury sends out to defend the Government when issues get acutely difficult – insisted: “Nobody is going to be stopped from appealing.
“We have to recognise what is currently happening is that there are a huge number of very speculative appeals that are going in, first encouraged by agencies on a no-win no-fee basis, chancing their arm hoping that there will be a reduction in their business rates.
Business rates are the equivalent of council tax
“That is frankly clogging up the system and getting in the way of appeals for those who have a genuine problem, where maybe there has been a mistake or an error, and that process is much slower than it should be.”
Official figures have revealed the Treasury could make an extra £1billion from the revaluation.
The Government says that forecast is based on growth and new properties coming into the system, not higher charges for existing rate-payers.
It highlights the £6.7billion package of rate relief it introduced to lift 600,000 firms out of paying any rates at all, and insists three quarters of firms in England will see their bills fall or stay the same from April.