Independent traders in a Devon town are deeply concerned about an increase in their business rates bills.

In Newton Abbot a sweet shop owner said his bill will go up by about £4,500 and a successful gift shop owner said the level of business rates means it would not be worthwhile for her to expand into a second shop.

The government has brought down the level of business rates but that has come at the same time as a revaluation of rateable values and a phasing out of Covid-era support, which has led to bills going up.

A Treasury spokesman said the government had set up a £4.3bn support package to ease the transition to new levels of payments for businesses.

Pubs and restaurants have also been hit by the changes with some saying they cannot see how they will survive.

A firm’s rateable value is based on how much it would cost to rent a firm’s property for a year, and is used to calculate a business’s rates bill.

Kyle Luscombe owns the Sweet Dylemma sweet shop in Newton Abbot and says he was hoping for more help from the government for independent traders.

He said: “We believed we were going to get more support from the business rates side of it for small local businesses.

“For us it just increases further costs – it’s another £4,500 for us – in a low margin area that’s a lot of sales needed to cover those costs.”

Hilary Cooling, owner of the Three Wishes shop next door said she was “exceptionally concerned” about the future of her business which has been in Newton Abbot for 18 years.

She said: “It’s clearly going to go up considerably and I think it’s going to close down the high street.”

Business leaders have criticised the budget for not providing scope for growth.

Hayley Kyte, owner of Yellow Umbrella Gifts, said businesses in her shop in Newton Abbot – which sells goods made by lots of local craftspeople – was going well.

She said: “I’d love to open another shop, I’d like to have multiple shops because our concept here is amazing.”

Ms Kyte said it was not worth expanding into other towns as that would lead to her losing small business rates relief on the original store, as well as paying the new levels of business rates on any new store.

David Austin is the third generation of his family to own Austins Department Store in Newton Abbot.

The company has expanded over the years and now covers about 55,000 sq ft of retail space in the town.

He said: “We have several buildings in the town centre – in two of them the business rates have gone up by nearly 25% and one of them, which I can’t believe, has gone up by nearly 40%.”

He added: “It’s a huge disappointment because the business rates were supposed to be reformed with aid for the high street as against out-of-town and online businesses.”

A Treasury spokesman acknowledged the revaluation of business rates and the tapering off of Covid support measures would have an impact on businesses.

They said: “We’re protecting the high street with the budget’s £4.3bn support package.

“This means most properties seeing increased bills – because of the revaluation and end of temporary rates relief - will have their rises capped at 15% or less next year, or £800 for the smallest properties.”

The Treasury said it was permanently cutting the business rates tax rate for 750,000 retail, hospitality and leisure properties from next April to help high street businesses.