Colliers slam 'superficial tackling of business rates issues '

The Chancellor missed a golden opportunity to reassure businesses and clarify his business rates strategy in the Budget.

That 's according to John Webber (pictured), head of business rates at Colliers International.

Rishi Sunak followed through on expectations that he would extend the current 100 per cent 2020/2021 business rates holiday for the retail, hospitality and leisure sectors for an extra three months to the end of June and then provide an up to two thirds business rates holiday for the following nine months.

However, Mr Webber says such moves are not enough. Colliers were calling for businesses in those sectors to have at least a six to 12 months full rates holiday, allocated on a needs basis, giving businesses proper time to recover from the impact of the pandemic and lockdowns, particularly given the staggered re-openings.

In Scotland a 12 month extension of the rates holiday has already been announced.

Colliers say the announcement also gave little to help businesses in other sectors who have not had the advantages of the business rates holiday who have also seen genuine hardship.

This would include the aviation industry, businesses in manufacturing (particularly those that supply retail/hospitality and leisure) and many offices businesses.

In the office sector in particular, the financial implications of the pandemic have been dramatic for many- as seen by the sheer number of companies appealing their rates bills via MCC (material change of circumstance).

Colliers estimate this number is now around 350,000.

Mr Webber said: “The Chancellor has failed to do anything about these 350,000 MCC business rates appeals snarling up the system, tackle the business rates multiplier now at outrageous levels of £0.51, commit to a 2023 Rating Revaluation, clarify confusing rules on State Aid limits or bring in a business rates arrears moratorium for those businesses, who because of the pandemic have been unable to pay their business rates bills. ”

”And to cap it all the Chancellor has granted the VOA a sabbatical for 3 months for no apparent reason - bad news for office ratepayers whose 2021/22 bills are being printed as we speak.

“Even the rates holiday for retail, leisure and hospitality is not as simple as it sounds. After the first three months it looks like it is going to be really cumbersome for businesses to apply and up to the already over stretched billing authorities to sort out. ”

“Whilst we were already disappointed that the Chancellor had delayed the business rate review until the Autumn, we had hoped there would have been something more to say today - it 's been disappointing that yet again he has failed to grab this opportunity.

“Only skimming the surface on this issue will have dire consequences for many struggling businesses across the board. ”

Paul Faulkner, chief executive of Greater Birmingham Chambers of Commerce, added: "Whilst there much to admire in Wednesday 's Budget, it 's fair to say the Chancellor missed a trick in not using the statement to fundamentally tackle long standing issues related to the business rates system.

“Our Quarterly Business Report has consistently highlighted the concerns that local businesses carry in relation to this onerous and outdated system and dealing with the fallout from the pandemic shouldn 't be a convenient excuse to kick the issue into the long grass.

“Clearly, the Chancellor did the right thing in extending the relief measures for those in the hospitality and retail industries but there was no mention of supporting the aviation industry for example - regional powerhouses such as Birmingham Airport have been pummelled by the crisis and need all the support they can get to get through the next few months.

“As we set out in our submission to Treasury earlier this year, any review of the business rates system must consider the frequency of revaluations, the value of the multiplier and a review of the neutrality principle - otherwise tinkering at the edges of a fraying scheme will do little to alleviate the grave cost pressures that many businesses up and down the country are facing right now."

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