Organisations representing thousands of businesses have written to the Chancellor, called on him to push ahead with business rates reform in the Budget on March 11th.
In a letter to Chancellor Rishi Sunak MP, organisations including the Association of Convenience Stores, British Chambers of Commerce, British Property Federation and Federation of Small Businesses have set out four simple principles that would ensure that business rates are fairer, more accurate and fit for purpose in the future.
The four principles set out in the letter are:
- Remove the requirement for business rates to be fiscally neutral to allow for more flexibility in the system
- Businesses that invest in and modernise their business premises must not be penalised immediately with higher rates bills
- Make the system simpler and reduce the burden on the Valuation Office Agency by removing the smallest businesses from the rating list altogether
- Ensure that businesses are confident in the accuracy of their rates bills by reviewing the inefficient Check, Challenge, Appeal system – and ensure that the VOA is sufficiently resourced to deliver valuations and support ratepayers.
Association of Convenience Stores chief executive James Lowman said: “We have set out four simple principles that will give a much needed boost to British businesses, and urge the Chancellor to take these principles forward as part of his first Budget on March 11th. The debate on business rates has gone on long enough without action to address the flaws in the system. This letter is clear that without reform, the current system is no longer fit for purpose.”
British Beer & Pub Association, Chief Executive, Emma McClarkin:“With pubs paying 2.8% of the rates bill, despite accounting for just 0.5% of business turnover, root and branch reform is clearly needed. The Government has committed to fundamentally reforming the business rates system, so now the Chancellor must take action in his first Budget on March 11th. The BBPA stands ready to help advise on a fair system that works for pubs.”
British Chambers of Commerce Director General, Adam Marshall said: “Britain's broken Business Rates system is one of many upfront costs that are holding back the growth potential of companies across the UK.
“It’s time for the government to deliver on its manifesto pledge to review and reduce business rates so firms can invest in their people and prospects instead.”
British Property Federation Chief Executive, Melanie Leech; “We urge the Government to consider these four principles as part of its forthcoming review of the business rates system. The system must provide more flexibility and better reflect economic conditions. Our high streets in particular have borne the brunt of an unresponsive tax system for too long – with many businesses continuing to see increases in their business rates bills, even while rents fall. This is unsustainable and it’s stifling investment into our towns and cities.”
British Retail Consortium, Chief Executive, Helen Dickinson OBE: “The business rates system holds back investment and contributes to job losses and store closures up and down the country. It is clear that any tax that punishes businesses that invest in their property is not fit for purpose. Indeed, the Government even raises rates on firms who make investments that reduce carbon footprints and save energy, such as solar panels.
“The Treasury Select Committee rightly called the business rates system ‘broken’. While we support the Government’s review of the system, it must be comprehensive in its scope, or the opportunity for real reform will be lost before it has even begun.”
Federation of Small Business National Chairman, Mike Cherry: “We urge the Government to use the forthcoming Budget as an opportunity to finally tackle the issue of regressive business rates that only end up pricing small firms out of business. At a time when so many small businesses are desperately under the cosh, we must be doing all we can to support SMEs and a reform of the business rates system under these suggestions will go some way to alleviating the huge pressures that are burdening business.”
UK Hospitality Chief Executive Kate Nicholls said: “High streets have been hammered by a business rates system that was devised years ago and its now totally out of date. Hospitality has been on the front line and businesses have been squeezed, and venues forced to close, because of out of control rates bills. The Government has promised us a full review of the system, but it is yet to deliver. It must conduct its review as soon as possible, otherwise more businesses will close, jobs will be lost and high streets will suffer.”
Revo Chief Executive Edward Cooke said: “The government must deliver on its commitment to review the business rates system, and act swiftly and radically by reducing the tax rate immediately. This is critical to ensuring that the UK remains internationally competitive, and so our towns and cities thrive in the future. The Chancellor must put in place a system that allows for iniquitous downward transition to be abolished, which would signal meaningful support for retail businesses, particularly in areas where the Conservative Party was lent votes in the General Election last year.”
BIRA Chief Executive Andrew Goodacre said: “Bira was pleased to see the rates discount increased to 50% and in line with Bira policy. However it is clear that there needs to be wider reform of business rates if retailers are to overcome the current challenges presented by operating bricks and mortar stores. The government know this and they should not wait for a total solution and introduce these measures as soon as possible”
The full letter is available here.
