Government launches call for evidence for fundamental review of business rates

The government has launched a call for evidence as it begins its long-awaited fundamental review of business rates.

The beginning of the reform process has been welcomed by UKHospitality, which has described the business rates system as the "largest barrier to growth in our sector".

In documents published today, the government has 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.

The Treasury has said it will consider all elements of the current system and explore the potential strengths and weaknesses of alternative property and online taxes put forward as possible replacements for rates.

UKHospitality chief executive Kate Nicholls said: "Securing a full review of the business rates system has been a priority for UKHospitality and its predecessor trade bodies for years. We identified it as the largest barrier to growth in our sector years ago. We have pushed extremely hard to convince the government to act on this, so it is great to finally see positive action."

The government has also confirmed that the revaluation planned for 2021 will now take place in 2023. The change in 2023 will be based on property values as of 1 April 2021, in a bid to reflect the impact the Covid-19 pandemic is likely to have on values.

Nicholls added: "Kicking back the revaluation by a further year will give businesses some much-needed breathing room and stability. Pushing back should also provide time for reforms to be introduced and a more accurate reflection of property values following this crisis, which has clearly had an enormous impact on trade.

"However, with rateable values therefore staying high for longer, the need for an extension of the business rates holiday is more acute. The holiday has been a hugely valuable lifeline for hospitality businesses and we need the government to extend it for another year to give the sector the extra degree of flexibility it needs to get back on its feet. Even though venues have begun to reopen, the immediate future is still uncertain. Businesses are going to need all the support they can get if they are to survive the winter."

The Treasury has also announced today that it will review the alcohol duty system.

To take part in the call for evidence, click here.

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