Thirteen major business groups claim rates shake-up is ‘illegal’ as they sign letter warning small firms could be blocked from appealing rises

THIRTEEN major business groups have claimed a business rates shake-up is illegal signing a letter warning small firms could be blocked from appealing rises.

Changes could see businesses face increases of 300 per cent from April, in the first revaluation of rates for seven years, while new regulation may stop appeals considered within a margin of error.

Groups including the British Retail Consortium, the Confederation of Business Industry and the Federation of Small Businesses have signed the letter.

The letter reportedly says the changes will stop retailers from challenging bills unless they are "wildly inaccurate".

The business groups claim the Government does not have the right to ban appeals on the basis of accuracy.

Small firms will be forced to sack staff or even close down after the planned hike in business rates, a damning survey of bosses found.

The Federation of Small Businesses probe found that three quarters of firms said business rates are one of the biggest issues facing them.

This is far higher than the 36 percent who said economic uncertainty and the 33 percent who said recruiting the right staff are their top concerns.

The industry leaders fear small firms in London will be forced to lay off staff or close down altogether unless they are shielded from the proposed sharp hike.

But the Government has insisted the North will see a £600 million windfall from the planned changes every year.

Sajid Javid also claimed the Midlands would see a reduction in rates of more than £230 million a year.

The Communities Secretary said: “The revaluation of business rates will help make sure bills are accurate, with nearly three quarters of businesses seeing a fall, or no change.”

He added: “And across the country, there’s also a £3.6billion scheme to support companies affected by the business rates revaluation.”

Under a controversial overhaul of the system due to come into force in April, only businesses in properties with a rateable value of up to £12,000 are exempted from paying the tax.

Retailers in parts of London fear their bills will more than double as property prices have soared in recent years — and they warn that the shake up could put them out of business.

While small shops and pubs will suffer, Britain’s biggest supermarkets – Tesco, Asda, Morrisons and Sainsbury’s – will benefit from a reduction in rates for their warehouses and superstores.

And earlier in the week the Sun revealed Amazon will see a business rates cut because many of their mammoth warehouses are based away from town centres.

Sue Terpilowski, the FSB’s London chairwoman, said last night: “London is in serious danger of losing its vital support system of micro and small businesses.

“The average micro business will have to find £17,000 to cover business rates from April this year.”

And she warned: “Given the importance of London’s economy to the rest of the UK, this will have destabilising consequences.