As widely anticipated the Chancellor used his Autumn Statement to confirm a review of business rates administration, following repeated calls from business and property groups to take action.
The British Property Federation (BPF) recently published a report, Better Rates for Better Business, in which it sets out a number of proposals to make the system fairer for businesses.
At the time of its publication chief Executive of the BPF, Liz Peace, said: “Unless Government acts, there may come a time when rates become so high that they squeeze investment out of all but our most prosperous towns and cities.
“This would be a disaster for the Government’s welcome aspiration to rebalance our economy and to bolster the role of regional cities as engines of local growth.”
In yesterday’s speech George Osborne pledged that the review will be concluded by the time of the Budget in 2016, with its interim findings made public in December 2015.
Chris Billson (pictured), a Director of commercial property specialists Prop-Search, wonders if the review will go far enough.
“The priority for all businesses is a root and branch reform of the business rates system as it is now seen as being an out-of-date way to tax businesses.
“For instance, in the age of the internet, many have asked why a company should be taxed on the physical space it uses?
“Unlike every other tax in the UK, the business rates burden does not fluctuate with the economic cycle, meaning businesses have to pay the same regardless of economic conditions.”
The Chancellor also announced that Small Business Rates Relief will be extended until April 2016.
This means that around 385,500 small businesses will continue to benefit from 100 per cent relief from business rates, with reductions for many more on a sliding scale.
The Government will also continue to cap the annual business rates increase at 2 per cent from April 2015 to March 2016.
In addition the Chancellor announced that business rates in Wales will be fully devolved to the Welsh Government.
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