These are the UK regions most affected by the business rate rise Official data has revealed the UK areas that have seen the biggest hike in business rates in the last five years. Written by Helena Young Updated on 8 August 2023 Our experts We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. Written and reviewed by: Helena Young Lead Writer Following the rise in small business rates in March, official figures have revealed the UK regions where the cost of renting a commercial property has skyrocketed since 2018.BPI, an online auction platform for commercial assets, analysed data obtained from 155 local councils to discover the average annual increase in rates, and how the added costs might be impacting today’s SMEs.According to their findings, business rates rose by an average of 18% in 2022, compared to 2021. Companies based in North West Leicestershire have been the most affected, with costs rising almost 30% in this area.SME profits have already slimmed during the cost of living crisis, as consumer appetite wanes. Combined with the surge in energy prices, the business rate rise represents a substantial tax for many companies to factor into their reduced bottom lines.Areas most affected by business rates increaseOf those councils that responded to the FOI request, BPI reports that firms in North West Leicestershire saw the biggest percentage increase in rates, with a reported 29% uplift across the last five years.Great Yarmouth Borough Council saw a 22.19% increase across the same time period, followed by the London Borough of Lambeth with 19.27%.On average, SMEs in all ten councils saw an increase of 16.62% in business rate payments, representing an astonishing financial strain on SME cash flow reserves.The BPI data shows that the top 10 councils which saw the biggest percentage increases in business rates are:UK councilPercentage increase 2018-23North West Leicestershire29.13%Great Yarmouth Borough Council22.19%London Borough of Lambeth19.27%Dumfries and Galloway Council16.24%Swale Borough Council15.02%London Borough of Hackney14.66%Ashfield District Council13.63%Thurrock Council12.44%Central Bedfordshire Council12.17%North Lanarkshire Council11.49%The uplift in business rate charges dealt another blow to the post-COVID high street. UK town and city centres have been rapidly declining since consumers largely moved online during the pandemic, leading many big-name brands to go into administration.The problem is also affecting SMEs. Government statistics show there were more than 105,000 UK business closures in Q1 2023, with just 79,000 new ones. This is the largest recorded net decrease on record.What is Small Business Rates Relief (SBRR)?Any firm that occupies non-domestic or commercial properties must pay business rates. However, eligible firms can also qualify for Small Business Rates Relief (SBRR).Small Business Rate Relief (SBRR) is a national discount scheme to make owning or renting a commercial property more affordable for SMEs.SBRR has been an important support pillar for UK small businesses. According to BPI, local councils across the UK paid out a total of over £2.6 billion of SBRR to small businesses in 2022.Alternatives to business ratesDespite the SBRR, and other relief funds, many UK small business owners still say the support for business rates is not enough to help them through the difficult months ahead.In March, the chancellor’s Spring Budget left a sour taste for SMEs, who felt the threshold for SBRR should be raised to offset the hiked corporation tax bill. Tax rates increased by a third from 19% to 25% this April.Henry Spencer, Operation Director at BPI, advises organisations which are struggling to afford business rates to take stock of their existing assets, in order to identify where savings might be made, or overheads cut down.“Review your current plant and machinery, excess stock, and other business assets,” he advises. “Streamlining this will save you space and allow you to enhance your cash flow.”Another option is to switch to coworking space. These are funded by the building providers, who take care of business rates, as well as energy fees and maintenance charges. Tenants simply pay a membership fee, generating significant cost savings for the business.In fact, immediately after the business rate rise came into effect in March, Startups’ research found that online searches for coworking space hit a two-month high as business owners scouted out flexible office contracts to lighten the pressure on cash flow.On top of this, with hybrid workers reluctant to return to the office, flexible office contracts offered by coworking providers are a good way to avoid wasting money on space that is only being utilised half the week.Coworking is even an affordable option for London-based firms. Check out our guide to the top cheap coworking spaces in London to learn about the options available. Share this post facebook twitter linkedin Tags News and Features Written by: Helena Young Lead Writer Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.