Business rates are crushing small businesses, killing our high streets and need reform.

That’s the verdict of the Kent and Medway chairman of The Federation of Small Businesses (FSB).

Roger House said the system was a “blunt tool.” It needed a radical overhaul in the wake of a survey revealing that almost one in 10 small firms are paying more in rates than rent.

The FSB survey of nearly 2,500 members, including some in the Kent and Medway branch, found that a fifth of respondents pay full business rates, with three in 10 firms receiving some form of rates relief, such as small business or rural rate relief.

Mr House said: “There is no doubt small businesses across the county are struggling for survival. Indeed, business rates are one of the highest costs for many Kent businesses after wages and rent.”

“Businesses will continue to be lost as a result of this outdated and unfair system. The Autumn Statement will need a wide range of measures to target relief at businesses most in danger, and it will need to talk to business about a major overhaul of the system. It doesn’t work anymore; it is crushing small businesses and killing our high streets. That surely can’t be right.”

The FSB believes the business rates system is cumbersome and overly complex, and would like to see the Government take a formal review to make it simpler and fairer. It claims that while business rates generate a huge sum for Treasury, it is not related to economic activity.

With another inflationary rise due to be calculated in September, the FSB wants the Government change the inflation index used to calculate annual increases from the RPI to the CPI to bring it into line with other government policies. The FSB believes that changing the indexation in this way, as recommended by Mary Portas, could help small firms on the high streets of Kent and Medway.

Mr House added: “The current rating system is a blunt tool for maintaining the Government’s income even when everyone else’s is shrinking. It takes no account of ability to pay, or changes to economic conditions. It is based on rental values but only adjusts its valuation assumptions every five years. Its treatment of empty property is tantamount to a tax on no income, and it continues to use RPI for annual tax increases because it is normally above the Governments official measure of inflation, CPI. The FSB wants to see a level playing field for all Kent businesses.”