Chancellor George Osborne finally revealed details of the Government’s long-awaited review of business rates in today’s Budget.
The move to base annual increases on the Consumer Price Index (CPI), instead of the higher Retail Price Index (RPI), has been tentatively welcomed, but it will not come into effect until 2020.
Business rates revaluations will also be conducted more frequently – at least every three years – Osborne said.
Here we round up the reaction to the measures:
“Today’s budget was a recognition that the system is no longer sustainable and is in desperate need of fundamental reform. Retailers will have noticed that any of the intended support will not be felt for another year and more, however.
“I would encourage the government to maintain its level of ambition of reform and look at reducing the multiplier as soon as possible. This is a tax after all, which when it rises next month, will be at nearly 50% of annual rental values. The plans for reforming business rates are still at odds with the government’s aspiration for a low tax economy.
“Only fundamental reform of the system will realise the benefits of continued high availability of local jobs especially in deprived areas, improved productivity, rising exports, the delivery of training and apprenticeships and, critically, the reinvention of our high streets and town centres” - BRC chief executive Helen Dickinson
On carbon reduction - ”We believe that through simplifying the energy efficiency policy landscape we have the opportunity to streamline investment in energy efficiency helping retailers to realise their ambitions in energy demand reduction and climate change mitigation, creating growth and securing our energy future.”
“The move to CPI will be welcomed by hard-pressed firms – but they will ask why not implement it immediately? By waiting until 2020 to make the change, and sticking with the discredited RPI measure, the Chancellor is unfairly squeezing UK plc for an extra £5.2 billion.
“Whilst welcome, this change will do little to allay ratepayers’ anger with the business rates system.
“By waiting until 2020 to make the change, and sticking with the discredited RPI measure, the Chancellor is unfairly squeezing UK plc for an extra £5.2 billion”
Jerry Schurder, Gerald Eve
“They seek a cut in their excessive rates bills, already the highest local property tax worldwide, not just a moderation of the speed of increase. It’s great that the Chancellor has acknowledged this injustice, but supremely cynical that he’s not doing anything about it for another four years.” – Jerry Schurder, head of business rates at property consultancy Gerald Eve
“The Government has responded to the loud calls for change from small businesses and major retailers, and the Chancellor has accepted the need to link business rates to CPI, but not until 2020.
“Such a change could eventually lead to a significant loss of annual revenue increasing each year, which may in fact benefit large businesses over smaller businesses as they pay a larger proportion of tax,” – Gerry Biddle, business rates consultant at Deloitte
“Whilst a move to CPI indexation is an improvement, it does not address flaws in the system. And further, you have to ask why business needs to wait four years for this change.
“The announcement to move towards more frequent revaluations is, however, to be welcomed – and on this aspect it is pleasing to see the Chancellor has listened to the advice of businesses.
“However, there is still a critical element missing and that is ensuring more transparency in the calculation of the tax. Without change in this area more appeals are inevitable and more frequent revaluations will be impossible.” – Edward Cooke, director of policy and public affairs BCSC
“There is a lot here for business to be positive about. But, representing the retailers and property owners in Oxford, Bond and Regent Streets and the surrounding districts, there is also a lot missing.
“Retailers in London’s West End are still facing business rate rises of up to 80% from next April as a result of a revaluation, and we had no clarity today from the Chancellor as to what help, if any, he will be giving businesses in the capital to meet these costs.” – Jace Tyrrell, chief executive of New West End Company