The chancellor is under growing pressure to take action on business rates in next month’s Budget, as anger grows among retailers about the impact of April’s revaluation.
The government has claimed the revaluation will see the biggest-ever cut in business rates, with three-quarters of all businesses seeing their rates fall or stay the same.
However, yesterday the heads of organisations representing more than 100,000 businesses wrote to all MPs warning retailers across the country face a huge rise in costs because of the revaluation.
The groups, including the ACS, BRC and the CBI, called for the government to increase the frequency of revaluations and bring forward plans to link the rates multiplier to CPI before 2020, as part of a wider call for urgent action to reform the system.
The letter states: “The future of business rates is a key priority for us and we want to work with the government to deliver meaningful reform.
“We want to see action from the chancellor in the Budget to ease the burden on businesses that will see an increase in their rates bills, but also a longer-term commitment from the government to review property taxation in the UK.”
ACS chief executive James Lowman said: “There are still fundamental problems with the rates system which we’ve seen come to light as business owners face their new bills from April. The current system discourages investment for many business types, as any improvement to that business results in an increase to their rates bill. We are encouraging the government to take action in this area ahead of the Budget, as well as looking at the appropriateness of separate rating schemes for businesses like petrol forecourts, which are seeing rates increases of up to 150%.”
BRC chief executive Helen Dickinson added: “In the forthcoming Budget, retailers will hope to see commitment from the government to ease the burden across the board by bringing forward the switch from RPI indexation to CPI so that rates better reflect economic conditions. In addition, the chancellor should take the opportunity to ensure businesses large and small receive business rates reductions following the revaluation immediately, and implement the same protections for those facing large increases that were in place during the last revaluation in 2010.”
Melanie Leech, chief executive of the British Property Federation added: “At this stage, the government can immediately support businesses by making sure the appeals system is fair and not stacked against them. Current proposals to limit the ability of tribunals to correct excessive business rates assessments should be dropped.”
As the letter was being sent out, communities secretary Sajid Javid was telling the House of Commons he was “acutely aware” of problems faced by some retailers, adding: “There are clearly some individual businesses facing particular difficulties.
“I have always listened to businesses and this situation is no exception,” Javid added. “It’s clear to me that more needs to be done to level the playing field and make the system fairer.”
The government’s first revaluation of business rates in seven years is due to see taxes on some properties rise dramatically from April, particularly in London, where values are set to shoot up by an average of 26.2%.
Earlier this week, Sainsbury’s chief executive Mike Coupe slammed the current system of business rates as “archaic”.
Coupe said the revaluation could pose “serious challenges” to the high street and result in “ultimately more closures”.
Last week, business leaders also joined forces to speak out about government plans to limit appeals against business rates, saying the move was fundamentally unfair.
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