Government inaction on Business Rates Reform 'disappointing ' - Colliers
The Chancellor 's inaction on Business Rates Reform in his Spring Statement was 'disappointing ', according to leading Business Rates consultants Colliers International.
John Webber (pictured), head of Business Rates at Colliers said: “Although this was primarily a 'consumer-led ' Spring Statement addressing issues such as costs of living rises and high energy bills, it was disappointing that the 'elephant in the room ' - Business Rates - was largely ignored, despite the impact that ultra-high rates bills has had on businesses in recent years. ”
During his Spring Statement, the Chancellor reiterated the 50% Business Rates discount for the retail, leisure and hospitality sectors coming into effect from 1st April, with a cap of £110,000 per business. The retail and hospitality sector can also expect a rating revaluation in 2023, whereby rates bills will be based on rental values of 2021.
Webber continued: “The retail and hospitality rating revaluation should hopefully mean bills will come down for many in these struggling sectors. But this will be meaningless if the government does not allow business rates reductions to be implemented immediately rather than spreading them over the years of the list in a transitional arrangement as it did in the last list of 2017. ”
“Downwards transition meant many businesses in these sectors paid too high business rates for too long. It was a key factor in the demise of Toys R Us, Laura Ashley and other high street brands and had a major impact on the high streets of many of the UK 's provincial and poorer towns- areas of the country the government claims it now wishes to 'Level Up '.
“Retailers and other high street operators will be now considering their business plans now for next year and looking closely at their future business rates liabilities, particularly when the Covid-related reliefs come to an end.
“It is essential the Chancellor provides reassurance that rates bills next year will immediately reflect the lower rents we are seeing in the market now -providing incentives for businesses to keep or expand space and for property investors to invest in the sector across the UK.
“Without this reassurance the Government 's Levelling Up Agenda will be meaningless, and the high street unlikely to get back on its feet. We are disappointed the Chancellor was not more forthright in his Statement today. ”
Erin Henwood, policy advisor at the Greater Birmingham Chambers of Commerce, said: “It was frustrating to see little movement from the Chancellor on Business Rates reform, particularly during a time in which firms desperately need breathing space to cope with huge debts and spiralling overheads as a result of the pandemic and current cost-of-living crisis.
“Businesses have long been calling for fundamental reform of the system, including a reduction in the multiplier and increasing incentives to encourage business investment. As such, the Government must build upon the feedback received in the recent Business Rates consultation to create meaningful change. ”