Last updateFri, 24 Mar 2017 12pm


Autumn Statement: Business rates due for review


The chancellor has announced a long-awaited structural review of business rates in his Autumn statement speech.

George Osborne urged business groups to engage with the government for the review, which trade bodies said was needed to stop the current system "sucking the blood out of the high street".

It had been reported before the speech that the rates bill for supermarkets could grow by as much as 40 per cent, on the back of a revaluation of Britain’s property scheduled for next year.

The announcement, however, was focussed more to small businesses, as it accompanied Osborne’s pledge to raise small business rate relief for another year.

He said: “Last year, to help our high street shops, pubs and cafes, I introduced a new £1,000 discount on their rates. With the brilliant Small Business Saturday this weekend, I am increasing that help for the high street by 50 per cent to £1,500 next year.”

This element of the speech quickly garnered favour from industry lobby groups.

The British Property Federation (BPF) had already called for rates reform to restore fairness.

It said changes should not take place purely to help high street retailers compete with internet outlets. 

Liz Peace, chief executive of the BPF, said: “We need a system that is more responsive, both to changes in the economy and to the relative position different businesses find themselves in.

“Basing a property tax on nine-year-old valuations is simply unfair and inefficient, and other countries have shown that with the use of technology you can design a far more responsive system.

“The compounding effect of annual RPI increases is also meaning that a higher proportion of taxation each year is coming from business rates, sucking the blood from our high streets and eroding many other businesses’ competitive edge.”

The BPF recently outlined recommendations on rates for the government:

1. A move to annual uprating by CPI now, pending review and consideration of the best measure that will reflect growth.

2. To restore the pre-2008 availability of relief from empty property rates (100 per cent for industrial properties, three month grace period followed by 50 per cent for all others).

3. Moving to a system of annual revaluations.

John Cridland, director general of the CBI, said: “We wanted to see action to tackle our clunky and outdated business rates system, so immediate help, by capping the increase and extending relief for small firms, coupled with a much-needed review, will be welcomed by businesses.

“Business rates will be a shot in the arm for families and growing firms as they look towards 2015.”

Subscribe to the magazine

We aim to advise you of the most up-to-date issues faced by major corporations and leading finance directors, in the form of interesting articles and individual stories.

If you are interested in subscribing to the Director of Finance magazine, register your details here.

Latest News

Most Read

Follow Us On Twitter