Chancellor Philip Hammond has confirmed in his Spring Statement that business rates will now be reviewed every three years.
Hammond also brought forward the next review from 2021 to 2020.
At present, business rates are reviewed every five years, which has resulted in steep rate hikes in places such as London, where property values have rocketed.
The move to a three-year review period, originally made in last year’s autumn budget, has previously been declared by some in the retail industry to be insufficient in effecting change.
Alex Probyn, president of UK business rates at property advisor Altus Group, said: “Three-year revaluation cycles are certainly workable. Whether they are entirely in the ratepayer’s interests depends on the detail.”
“A shorter valuation period undoubtedly has benefits in terms of the speed at which value changes are passed on to ratepayers, and it should avoid the massive step change we saw in 2017, but there is an inevitable increase in costs in revaluing more frequently.
”Government has stated that any changes must be revenue-neutral and this appears to mean that those extra costs will be passed to the ratepayer.”
“Bringing forward the next scheduled revaluation to 2021 will reduce the next step from the five years that we had been expecting.”
The burden of business rates has long been a concern to retailers and to some MPs.
In January, the Treasury Select Committee urged a review of business rates following a tough Christmas for retailers and amid fears that some businesses could collapse.
It said then: “Business rates damage the competitiveness of shops on the high street relative to large out-of-town distributors and online retailers.”
Sainsbury’s Argos chief executive John Rogers said at the time: “It is no surprise the profit warnings tended to be from those companies that predominantly have a high street presence, because they are paying a cost to their business that’s not borne by most of their online competition.”
Rogers, whose business spans high street stores to online, added: “What’s required is not just incremental changes, but a much more radical reform.”
Single-use plastics and global etailers
The Chancellor also laid out plans, first announced in last November’s Budget, to use the tax system to help achieve the Government target of eliminating single-use plastics waste by 2042.
He will now launch a consultation on how that process would work.
In the Spring Statement, he revealed that universities and business would be able to tap into a £20m innovation fund to help them develop new technologies aimed at tackling the issue.
He issued a warning to etailers that the government was preparing to crack down on the amount of tax paid by etailers such as Amazon.
He said: ”In the autumn, we published a paper on taxing large digital businesses in the global economy and today we follow up with a publication that explores potential solutions.
“I look forward to discussing this issue with G20 finance ministers in Buenos Aires at the weekend.
“We also published a call for evidence on how online platforms can help their users to pay the right amount of tax, and we will consult on a new VAT collection mechanism for online sales to ensure that the VAT that consumers pay actually reaches the Treasury.”
Commenting on the Chancellor’s plans on the two issues, British Retail Consortium chief executive Helen Dickinson said: “The Government needs to look more widely than simply focusing on digital tax, instead looking across all elements of business taxation.
“Specifically, there is a need to rebalance away from input taxes (on things like people and property) and towards output taxes (on profits), as well as address other underlying problems with the way that different taxes work.
“This would attract investment, which would lead to greater productivity and improved living standards.”
She added: “We recognise that we need to do more to reduce plastic.
“A plastics tax begs a number of questions, such as the timeframe for exploring a tax, what ministers hope to do with the receipts, and the impact on consumers and businesses, and we look forward to working with Government on these issues.
“All plastic packaging items are already ‘taxed’ when used under producer responsibility measures. Rather than introduce a second system, the current system could be reformed.”