A recent survey by the Forum of Private Business (FPB) revealed that its members are receiving access to a free business rates appraisal service amid fears that they would have to pay inflated rates bills for the next five years.

Business properties are revalued every five years to ensure that rateable values reflect the changes in the property market. According to FPB, the main reason behind these fears is that the present revaluation is based on rent prices from April 2008 when property prices were high and the recession had yet to hit. Small businesses believe that they will be facing unfairly high bills despite the recent slump in the market.

Its members’ concerns have come about after a Business Location Survey was carried out ahead of the revaluation of rateable values in October. The survey showed that 79% of respondents believe that their business rates will increase in April 2010, with an average expected rise of +3%. High Street businesses expect an increase of over +5%, whilst office-based businesses are looking at a rise in excess of +2%.

Matt Goodman, the FPB’s policy representative, said: “The 2010 revaluation, while not a revenue generating exercise, will affect most small businesses’ rate bills. Our survey shows that business rates are ranked as more of a concern than utilities and staff costs, and most of the businesses surveyed fear the worst – that their rates will go up”

However, help is at hand as, according to the Valuation Office Agency (VOA), ‘transitional relief’ will be available for those ratepayers facing the largest increase in bills and the revaluation will actually result in £5m less revenue for the Government and lower bills for many businesses.

The FPB in response has called for the transitional relief scheme to be extended to five years until 2014/15 with annual caps being applied to changes to any rates valuations over the period. With 61% of respondents also stating that the relief scheme should also apply to empty properties, following the removal of empty property rates relief in 2008.

Christine Cheesmur, FPB member, said: “Transitional relief is so important for firms facing an increase in their rates bills, particularly in the current economic climate. The Government should reinstate it in a way that genuinely helps businesses to control costs.”