More than one in three small firms (36%) expect to see their business rates increase from 1 April, according to research by the Federation of Small Businesses.
Of those facing a rise, a substantial proportion (44%) of FSB members say their business rates will eventually rise by more than £1,000 per annum. And one in five (21%) will see their annual bill increase by more than 40%.
The FSB says these "drastic hikes could have massive consequences for the growth of those small businesses hit by this rates bombshell".
Of the small businesses facing a rise in rates, more than half (54%) expect profits to fall and 38% are set to increase prices. Crucially, 55% plan to reduce, postpone or cancel investment in their business - which will hit UK productivity and growth, warns the FSB.
Even more worrying is that 19% of those polled said they may consider closing down or selling their business as a result of the hike in their bills.
"Profitability across the UK small business community is already falling," said Mike Cherry, FSB national chairman. "The costs of doing business for small firms are now at their highest levels since early 2014. The last thing we need is a business rates burden so heavy that it threatens the future growth prospects of our entrepreneurs.
"To add insult to injury, those who need to challenge their revaluation assessment are now faced with a new but rigged appeals system - which will prevent small businesses with genuine concerns about their rateable values from being able to seek justice and redress. We are concerned that many could turn to cowboy ratings agencies already bombarding business owners with letters promising the earth."
The seven-year gap between this year's revaluation and the last has "stored up all kinds of problems for our business community", said Cherry. "The solution is for the Chancellor to use his Spring Budget to announce a cross-party commission to propose measures for a replacement business tax system linked fairly to the ability to pay."
The business rates system, said Cherry, "is an unfair, regressive tax which hits small firms before they've had the chance to make their first £1 in turnover, let alone profit … our survey shows the delayed revaluation harms too many small businesses who face unsustainable and unaffordable rises."
Excellent service, and a very professional approach to all our questions and throughout the course from start
Authorised and Regulated by The Solicitors Regulation Authority. Authority number 591294.
For details of the professional rules governing the conduct of solicitors go to www.sra.org.uk/code-of-conduct.page