As expected, HM Treasury has announced that it will conduct a fundamental review of business rates (in England) with the objective of:
- reducing the overall burden on businesses
- improving the current business rates system
- considering more fundamental changes in the medium-to-long term
The work of the review will focus on four main areas: These are:
- improvements that could be made from April 2021, alongside the forthcoming revaluation including regarding the Transitional Relief Scheme
- reforms to the current business rates system to put the tax on a more sustainable basis. This will include:
- whether a tax on open market rental values remains the best base for commercial property
- how open market rental values are determined, and how often
- the effectiveness and operation of different reliefs
- how to minimise the impact of business rates on investment and growth, including the treatment of plant and machinery
- how the business rates multiplier(s) should be set
- who pays the tax
- the administration of business rates, covering the valuation and appeals process; billing; and compliance with the tax
- exploring alternatives to business rates, particularly within the taxation of land and property.
Charitable business rates relief is worth up to £2bn in England alone, so CTG will be calling on the Government to protect and where possible strengthen this valuable relief.
Alongside supporting the government in its core aims regarding the economy, productivity and its fiscal rules, the review will also have particular regard to:
- the role of business rates in the funding of local government and local services, and the impact of any changes on business rates retention
- the delivery of existing reforms to the business rates system
- the practical challenges involved in any reforms, and necessary compromises
- the implications of the current and future subsidy control regimes
- the implications of any changes for the devolved administrations
The review will not consider the overall level of funding for local government.
The review will be carried out by HM Treasury and will report to the Chancellor of the Exchequer and the Financial Secretary to the Treasury.
The review will publish a call for evidence in spring 2020, and will report by autumn 2020.