The Government must stop business rates from crippling our high streets
The Government’s Business Rates Revaluations Consultation, proposing to introduce more frequent 3-yearly revaluations, comes to a close tomorrow (24 August 2021). The British Property Federation (BPF) today submits a response to highlight why fundamental business rates reform is long overdue and to provide recommendations for next steps.
The current business rates system is broken – the tax has failed to respond to significant changes in the UK economy. While rents in the retail sector outside of London have come down by over 50% in real terms over the last decade, business rates bills paid by occupiers have continued to rise.
The BPF has long campaigned for more frequent revaluations – but the Government needs to go further.
The BPF is calling on Ministers to set out a roadmap for moving to annual revaluations.
More frequent revaluations is only one of a number of reforms needed to make the business rates system fit for the future. Government must also reset the business rates multiplier at a fairer level, abolish downward phasing (where a deduction to a business rates bill, following a revaluation, is restricted) and provide additional business rates relief on empty properties.
The Government has proposed in this consultation to restrict property owners’ right to make appeals where the owner is not the ratepayer. The BPF does not accept this proposal – property owners must retain this right.
When a tenant seeks to exit a lease and leave the property, the property owner must be able to appeal to ensure the business rates bill for any new tenant is as affordable as possible – otherwise re-letting the property becomes significantly more challenging, and risks more empty properties blighting our high streets and town centres across the country.
Melanie Leech, Chief Executive, British Property Federation comments:
“The business rates system is undermining town centre recovery and poses a significant risk to the future of our high street businesses. Business rates have become so unaffordable, they are now hampering town centres’ ability to adapt, modernise and thrive.
“We welcome this first step to increase frequency and transparency of revaluations, but the Government must recognise it is only the beginning of the journey to create a more sustainable and fairer system. We need annual revaluations and transparency over how valuations are determined, more frequent revaluations is only one piece to the jigsaw.
“The idea of taking away property owners’ rights to appeal is unjust – property owners have a legitimate need to interact with the rating system, including where they are not the ratepayer, and must retain this right. This is a vital tool that allows property owners to effectively market their properties and secure new tenants. With the number of boarded-up shop fronts on our high streets increasing by the day, this suggestion is non-sensical and demonstrates a fundamental lack of understanding or appreciation of the role that property owners play in creating thriving neighbourhoods across the UK.”
See the BPF’s full response here.