The UK retail and property sectors are poised to hear whether the Chancellor will use his final chance to make meaningful reforms to the business rates burden in his Autumn Statement, according to the British Council of Shopping Centres (BCSC).
The retail property trade body, which counts a wide range of FTSE-listed property companies and town centre investors in its membership, is asking the Chancellor one last time to “press go on reform of this archaic system”.
Recommendations include regular revaluation of retail property, more in line with the volatile nature of property values. BCSC argues this would be made practical through the exemption of all hereditaments with a rateable value of less than £12,000, which currently account for 64% of all assessments made but only total around 6% of the income of the business tax. Further, it says, the Government should commit to going beyond the current Administrative Review by reviewing the link between the business rates multiplier and RPI to ensure business rates more closely reflect economic conditions.
A move such as this would allow business rates, so long lamented for being unresponsive to the changing economy, to marry up with current property valuations that reflect market conditions. Critically, it would also serve as a tax break to thousands of small and start-up companies, offering them the chance to grow and recruit, in turn driving up employment and increasing income tax revenues.
Edward Cooke, director of policy and public affairs, BCSC, comments: “The delay to the 2015 revaluation was a kick in the teeth to our industry - the impact of which, particularly in regions outside London and the South-east, the Government must not underestimate. As we reach the end of the current parliament, it is time to listen to what this sector needs. The Administrative Review on business rates was a positive move, but we need Government to go much further and review the way the tax rate is set if we are to see meaningful change to an outdated tax system.”