The British Property Federation (BPF) had urged the government to reform the business rates system ahead of the Autumn Statement.
In a report published today, the BPF has unveiled a list of recommendations for the Chancellor to consider in his annual Autumn Statement to Parliament on December 3.
“Unless government acts, there may come a time when rates become so high that they squeeze investment out of all but our most prosperous towns and cities.”
BPF chief executive Liz Peace
The research, Better Rates for Better Business, sets out that the calculation of business rates should be based on the annualised consumer price index (CPI) rather than the retail price index (RPI).
The BPF has also urged the government to help small businesses by taking the least valuable properties – those with a rateable value of less than £12,000 – out of business rates system entirely.
It also recommended for revaluations to be carried out annually in order for business rates to more fairly reflect the value of premises.
The BPF added: “The five-year revaluation is unfair, economically inefficient and inhibits investment in those places and sectors of the economy that are struggling. This is because it obliges businesses in areas of relative decline to pay too high business rates for too long and prospering businesses to pay too little.
BPF chief executive Liz Peace said: “Creating a business rates system that is fit for the 21st century is one of the central challenges facing the next Parliament. There is now widespread agreement that the tax, designed to help businesses thrive by funding the essential local services upon which they depend, is now constraining business growth and discouraging investment.
“Unless government acts, there may come a time when rates become so high that they squeeze investment out of all but our most prosperous towns and cities. This would be a disaster for the government’s welcome aspiration to rebalance our economy and to bolster the role of regional cities as engines of local growth.”