Business rates review delayed until the autumn
The government has announced that the final report on its business rates review will now be published in the autumn when there is more economic certainty.
Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the report will be released later in the year when there is more clarity on the long-term state of the economy and public finances.
The review was announced by the chancellor at last year's Budget and a call for evidence sought stakeholders' views on key issues including reforming the rates multiplier and looking at alternative ways of taxing non-residential property. This closed last year and the government is considering responses.
An interim report, which will include a summary of responses to the call for evidence, will be published on 23 March, along with tax documents, consultations and calls for evidence on a wide range of tax-related issues.
The government previously said its ambition is to develop a system that reduces the overall burden on businesses, puts the tax on a more sustainable footing and presents options for more fundamental long-term change.
John Webber, head of business rates at real estate company Colliers, said "procrastinating over this now is only going to mean more job losses across the sector".
He said: "The government has delayed its announcement four times in the last year. We were supposed to hear in the autumn, then in the New Year, then in the Budget and now it's the autumn again. This is despite the Treasury Select Committee producing a very credible report with sensible recommendations in autumn 2019 which now seems to have been ignored – not to mention all the consultations and reviews we've had in previous years.
"It's all very well for the chancellor to say he is postponing the report to the autumn to allow him to make decisions when the economic uncertainty caused by the coronavirus pandemic has receded. But that really is shutting the stable door when the horse has bolted. High business rates is one of the key factors that has helped decimate our high streets and the current system is skewed against the retail and hospitality sectors. We urgently need to rebalance this 50% tax by rebasing the multiplier to 30p in the £1 for a start and we need more frequent revaluations so that we don't see rates tied to totally out of sync rental values."
UKHospitality chief executive Kate Nicholls said: "The business rates system as it relates to hospitality has been broken for some time. It is an antiquated system of tax that bears almost no relation to the realities of business in the 21st century. It needs addressing, so a delay in the review is obviously a disappointment.
"If it must be delayed, then it is absolutely vital that the government uses the extra time to ensure it gets this right. After the misery of last year, a properly functioning, equitable rates system is now more critical than ever. In the meantime, there is now no reason why the business rates holiday should not be extended for another year. Extend this support, along with the VAT cut, at the Budget, then deliver a whole new rates system that no longer unfairly penalises our sector."
Photo: Flickr / HM Treasury
