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Chancellor’s proposed business rates changes too little too late

wantspacegotspace.co.uk - Chancellor’s proposed business rates changes too little too lateIt is understood that in his Autumn Statement on Thursday last week, the Chancellor George Osborne will announce that the rise in business rates bills from 01 April next year will be capped at 2% instead of being linked to RPI inflation at 3.2%. This decision is believed to be a response to lobbying on behalf of rate payers who are being increasingly hit by the burden of rates. It is too little too late.

Richard Wackett, National Head of Rating at Lambert Smith Hampton (LSH), said: “Whilst the cap is anticipated to cost the Chancellor more than £300m of revenue next year, when applied to a property with a rating assessment of £50,000, it will only result in a rates bill saving of £282.60 for the year 2014/15. This is unlikely to make a significant difference to the viability of the business and much more radical changes to the rating system are required if they are to have any real impact on rates bills that are perceived by many to be crippling both industry and the High Street.”

LSH’s five point plan will make business rates easier to manage, lower government administration burden and help small businesses to plan:

1.    Reverse the decision to delay the revaluation until 2017: This will bring valuations up to date and rebalance the business rates burden to reflect today’s economy, not the economy of 2008.
2.    Introduce annual rolling revaluations: The technology exists to enable annual rolling revaluations, thereby de-mystifying the process for many occupiers and allowing rateable values to keep pace with changes in the economy.
3.    Rating self-assessment: Empower businesses to assess their own Rateable Values, subject to Valuation Office appeal, statutory deadlines and remedies for failure to comply.
4.    Abolish empty rate charges: They inhibit new development and the tax take is lower than the potential upside in other areas of the economy, such as construction and new development.
5.    Create a flat small business rate: A low flat rate tax for small businesses, similar to the VAT flat rate scheme, would remove the need to assess small properties for rating and facilitate significant reductions in government administration costs.

Richard added: “The pressure is mounting on the Chancellor to make the most of the fragile, but real, signs of recovery by relieving business of punitive and increasingly regressive taxes on commercial buildings. Now is the time for the Chancellor to announce a substantial reform, which would reduce the Government’s administration burden, allow them to settle appeals more efficiently and remove artificial barriers to further development and growth.”

Posted by The Editor (wantspacegotspace) on 10th December 2013

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