Business rate rises in Wales capped at 2%
Business rates in Wales will be capped at 2%, the Welsh government has agreed.
They were set to rise in line with the rate of inflation at more than 3%, but assembly members unanimously supported the lower rate.
The decision follows concerns that some firms were paying almost twice the amount they should.
The increases will come into force on the April 1 and will match those announced in England and Scotland.
Historically business rates have been set at about half the cost of a property's rent, but some companies are paying equal amounts for both.
Business Minister Lesley Griffiths said the decision was good news for Welsh businesses and local authorities.
"Capping the increase at a level which allows businesses to remain competitive with their counterparts elsewhere in the UK means they are not at a disadvantage, but there will be no financial impact for local authorities, which is very welcome given the current economic situation," she said.
Newport is one of the parts of Wales where the cost of business rates has been a problem.
End Quote Leonard Cole Watch repairer
We're not employing anybody so, fortunately, we're able to absorb it but we've had to increase our prices obviously to cover it”
Leonard Cole has run a shop repairing watches in the centre of Newport since 1965, and works there with his nephew Robert Gibbs.
He said the rateable value of his property rose from £12,000 to £20,000 in the last revaluation and he had no other choice than to pass the cost onto his customers.
"We're not employing anybody so, fortunately, we're able to absorb it but we've had to increase our prices obviously to cover it," he said.
"I think if we had to employ people we wouldn't be very competitive.
"What I would like is for the council to take over the rates, rather than the government. And then at least we could complain to them."
On Tuesday, assembly members agreed to follow the chancellor's Autumn Statement decision to cap business rates at 2%, instead of the inflation rate of more than 3%.
For the last 20 years business rates have in theory been set at about half the level a property would cost to rent.
Once the rateable value is set, rates increase annually in line with inflation.
But the last valuation was in 2008, at the peak of the market, and just before the financial crisis.
Since then shoppers have been spending less, businesses are less profitable and commercial rents have fallen.
But rates are still set on the valuations of what commercial properties are worth.
The next revaluation is not scheduled to take place until 2017.
Andrew West, of Cooke and Arkwright, said that in effect, businesses in some parts of Wales were paying twice as much in rates as they should be - and some were even paying more in rates than they were for rent.
The Federation of Small Businesses (FSB) said its members were extremely concerned about the issue.
Rhodri Evans, from FSB, said it was an extra cost members had to bear and he is calling on the Welsh government to reform the rating system as soon as possible to help businesses on Welsh high streets.