Missed opportunity for Government’s Interim Business Rates Report?

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Missed opportunity for Government’s Interim Business Rates Report?

This week the government published its much anticipated 33-page interim report on a ‘fundamental review of business rates’ in England. There have long been calls for a serious review and reform of business rates and the interim report had a “wide spectrum” of responses from 487 respondents, covering topics such as whether an online sales tax would benefit the high street, coupled with a unanimous call for the reforms on business rates in general.

However, the consensus is that the report has fallen short of what it needed to do, as it does not set out a clear position on whether there would be a substantial cut in business rates.

The review was launched last July, and business leaders have been waiting to find out whether the Chancellor was going to offer a much-needed lifeline to beleaguered retailers. Unfortunately, the report simply outlines issues that are being considered – essentially reiterating everything the industry has already been saying about business rates, without any real outline for policy change.

The report did inspire further debate among retailers and commentators about whether the implementation of an online sales tax would be helpful. Some respondents said it would “level the playing field” between bricks-and-mortar retailers facing huge business rates bills compared to online-only rivals. But others argued it “would not save the high street and should not be introduced if this is the sole aim” and warned that the tax would lead to price increases.

Many also called on the Treasury to fix the business rates multipliers, amend the “Check, Challenge and Appeal” system and introduce a zone-based valuations system. Furthermore, the length between reviews has also been called into question, with the majority of respondents asking that business rates revaluations happen every three years, rather than the standard five that currently stands.

On Thursday the Treasury was criticised for saying it plans to legislate against Covid-related business rates appeals and instead provide a new £1.5bn pot of funding to be distributed to sectors (outside of retail/hospitality/leisure), which have suffered most economically. While some experts think this will offer some relief to small business owners, others are labelling it as “catastrophic” and “draconian”. (Read more in BBC)

What is needed now are for these conversations to continue; for a roadmap to be created for real business rates reform to help the businesses that have been hit hardest by lockdown. And whilst many labelled this week’s report as a ‘huge disappointment’ we will have to wait and see what the government will do in the autumn when the full report will be released. In the meantime, bodies such as Revo, the BRC and BPF will no doubt continue the good fight of lobbying for fundamental reform to establish a system that is fit for the modern age of real estate.

Innesco team

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