The Government’s interim report of the fundamental review of the business rates system delivered on ‘Tax Day’ (23 March) has disappointed business rates experts at Colliers who were hoping for something new.
“Everything that was said has already been said on all previous consultations. It’s like Ground Hog day,” lamented John Webber, head of business rates at Colliers.
“We say what we think from what we see in the marketplace and from our clients, we submit evidence, the Government produces a report and then usually nothing happens. I know the Government is planning to reveal its thoughts in the autumn, but I can’t understand why they can’t reveal them now when the evidence is so unchanged?”
The interim review began by listing what the Government had done for the industry during the pandemic - primarily the rates holiday for the retail, hospitality, and leisure sectors, last year worth over £10bn to ratepayers, the extension of this relief at the Budget earlier this month and freezing the business rates multiplier in 2021-22, which it claimed would save businesses in England £575m over the next five years.
Colliers has pointed out that when listing industry responses to the various concerns about the businesses rates system, responses were pretty unanimous, with most respondents calling for:
- the system to continue but in a reformed way and for rates bills to be lower
- a reduction in the multiplier (UBR) to a percentage more palatable than the current plus 50p in the £ tax
- a reform of the Reliefs system, including empty rates relief
- plant and machinery clauses to be reformed to reflect the modern green age and encourage investment
- more frequent revaluations and removal of the transitional relief system
- overhaul of CCA and the appeals system
- transparency in working with the VOA
- consideration of other taxes such as an on-line sales tax to reduce the burden of business rates
Webber concluded: “Everything that I and my fellow professionals have been saying for years appeared in the interim report today. We are not sure why the Government needed a special ‘Tax Day’ to let us know this. We are desperately disappointed there is no indication of further action on business rates until the autumn, which seems like kicking the can down the road yet again.
“No action at this stage in the economy is harmful given the number of companies facing financial ruin. The Government had a real chance to grab the bull by the horns today. Instead it looks like it hasn’t even started the walk to the field.”