Government delays review of business rates
19 Feb 2021
The final report of the government’s fundamental review of business rates has been delayed due to the covid-19 pandemic and will now be published in the autumn
19 Feb 2021
Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances.
The fundamental review of business rates was announced by the Chancellor Rishi Sunak at last year’s Budget. A call for evidence was published in July 2020 to seek stakeholders’ views on key issues including reforming the rates multiplier and looking at alternative ways of taxing non-residential property.
The call for evidence closed last year and the government is currently considering responses.
An interim report which will include a summary of responses to the call for evidence will be now be published on 23 March, along with a number of tax documents, consultations and calls for evidences on a wide-range of tax-related issues.
As part of its £280bn package to support jobs affected by coronavirus, the government has provided a business rates holiday for eligible properties in the retail, hospitality, and leisure sectors, worth over £10 billion to ratepayers. This rates relief is due to end at the end of March, unless the Chancellor offers further rates support in the Budget next month.
The Spending Review also confirmed that the business rates multiplier would be frozen in 2021-22, saving businesses in England £575m over the next five years.
John Webber, head of business rates at Colliers, said: ‘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 are 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 re-balance this 50% tax by re-basing 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.’