'Radical' business rates review launched for Budget 2016
16th March 2015 | News
The Treasury has announced a ‘radical’ review of England’s business rates system, with its findings expected to be released in time for the 2016 Budget.
With just hours until Budget 2015, the Treasury has launched the review, which was first discussed in December’s Autumn Statement.
It said the review “paves the way for changes” to the current system which has been in operation since 1988.
Danny Alexander, chief secretary to the Treasury, said: “The time has come for a radical review of this important tax.
“We want to ensure the business rates system is fair, efficient and effective.”
The ‘root and branch’ review will assess how firms use property, what the Government could learn from other countries and how the current structure could be modernised to better reflect trends in property values.
“Lots and lots of people have views about how the business rates system doesn’t work, but as soon as you get into what an alternative system might look like there’s much less consensus,” added Alexander.
At present, business rates are charged to retailers based on the value of their shop or other commercial property; meaning that firms with similar turnovers can pay considerably different business rates as their respective properties may have varying rateable values depending on their location and size.
John Cridland, director-general, Confederation of British Industry (CBI), believe the current business rates system is “outmoded, clunky and regressive” and is “holding back the high street”.
“We’ll be making the case for removing the smallest firms from paying business rates completely … and introducing more frequent valuations,” added Cridland.
However, John Longworth, director-general of the British Chambers of Commerce (BCC) was rather more sceptical about the review that’s been launched, stating that “actions speak louder than words”.
“Unless a root and branch reform of business rates is delivered at Budget 2016, firms will regard this as a missed opportunity to tackle a huge brake on investment and growth,” added Longworth.
Image: Gareth Williams