In her first speech, the new Chancellor has said that she will follow up on Labour’s promise to reform business rates and, in so doing, make things easier for small businesses and the high street in particular.
Ratepayers are aligned on the need for change: business rates have become too expensive, too complicated, and too much of a disincentive to growth. Overlay this with an under-resourced and often inefficient approach to administration, and it is no surprise that there are few supporters of the current regime.
This is a clear opportunity for the long-advocated wholesale reforms needed to benefit businesses across the UK. In particular:
- Reduce and stabilise the amount paid – put simply: business rates are too expensive. We would advocate a material reduction in the multiplier to 30% and for this to be fixed throughout the life of the Revaluation (rather than indexed annually) to provide cost certainty and stability for ratepayers. This may require a reduction in the total amount collected, but we would also encourage a review of all exemptions and reliefs to ensure their ongoing relevance and to part-fund the reduction in the tax rate.
- Ensure growth and investment are supported rather than discouraged. Retail is one example. Operators need economic markets that support investment; as online markets become more viable, high street vacancy levels increase, employment reduces, and the town centre’s role as a key piece of social infrastructure is diluted. As one key initiative, we would encourage the government to review the BRC’s proposals advocating long-term sustainable change.
- Supporting sustainability initiatives – Plant and Machinery Regulations have not kept pace with modern business practices. Review and updating are required now if they are to remain relevant, particularly linked to investment in green technology.
Among other initiatives, we would encourage the government to consider how the system is applied. For example, the Valuation Office Agency (VOA) needs increased investment in its systems and resources in order to address the challenges that currently exist in the appeal system. The future role of the VOA in setting and maintaining assessments and how to standardise (centralise) the billing and collection process should also be considered. Both could reduce the cost to deliver in the longer term.
Ultimately, change will require political, business, and future voter support. We would encourage the government to do more than simply keep stakeholders informed. True consultation and closer, constructive dialogue with ratepayers and their advisers are needed to ensure future changes are optimised. There is huge potential in this moment to make a difference nationwide.
“In her first speech, the new Chancellor has said that she will follow up on Labour’s promise to reform business rates and, in so doing, make things easier for small businesses and the high street in particular.”