Business rates issue must not be glossed over - Colliers

A real estate expert says Chancellor Jeremy Hunt must not to gloss over the issue of business rates reform in tomorrow 's Spring Budget.

John Webber, head of business rates at Colliers, insists Mr Hunt must not miss the opportunity for a fundamental reform.

While in the Autumn Statement the Government gave some concessions, such as freezing the Multiplier and abolishing downwards transition in the next revaluation, these measures are the just tip of the iceberg, according to Mr Webber.

He said: “The Chancellor was, in reality, merely putting a sticking plaster on a gaping wound - the fundamental flaws of the business rates system remain and Budget 2023 is the chance to address them. ”

Colliers are calling on the Chancellor to take a series of actions, including:

• Reduce The Multiplier (the UBR used to calculate rate bills) to around 34p in the pound
• Extend Retail Reliefs post-2024
• Reform of the 'sticking plaster ' reliefs system and remove business rates deserts
• Extend empty property rates relief to 12 months and to other sectors
• Introduce annual revaluations
• Review plant and machinery
• Improve transparency from the VOA
• Reform unfriendly and ill-equipped appeal system
• Address rogue rating advisors by regulating the Ratings industry

Mr Webber added: “What we still need is a well-managed and transparent business rates system, that encourages rather than punishes businesses. In its 2019 Manifesto, the Conservative Party promised to cut the burden of tax on business by reducing business rates. This will be done via a fundamental review of the system.

“So far this has not been fulfilled. Far from cutting business rates, this year 's list will show a general 7.1 per cent increase in rateable value.

“And according to the OBR report the Government is forecasting that income from business rates will rise to nearly £36 billion by 2027/28 (from £28.5 billion in 2022/23), which appears contrary to the Conservatives ' manifesto pledge.

“The Retail and Hospitality sectors are still in line to make a major contribution to that increase.

“We urge the Chancellor not to ignore the call for urgent reform and use Budget 2023 to encourage investment and growth and help businesses of all sectors floundering in this over burdensome and unfair system. ”