From the blog
Autumn Statement – Business rates review
However, somewhat hidden from some of the headlines was a promise that, in 2016 (assuming the Conservatives regain power), business rates will be reviewed. The Labour Party and others have not yet announced their plans but one assumes a review will meet with common approval.
My first reaction was ‘thank heavens’. Changing this archaic and unfair system is a priority for businesses, particularly those based in town centres which are, by and large, disproportionately more expensive for rates.
Secondly, looking at the timeframe, I hoped that the Chancellor was serious about his aspirations and hadn’t picked 2016 as a way of kicking the problem into the ‘long grass’. We can all remember pre-election promises that mysteriously disappeared once the vote had been won afterall.
However, I was mainly left thinking about what may replace the current system. Overall, I am sure that any Chancellor is going to want to balance the books and isn’t going to allow reform of business rates to throw deficit reduction off track. Somehow, there needs to be a greater sense of fairness between in town and out of town rates bills; then trading from bricks and mortar needs to be incentivised compared to on-line retailing which is rates free; and, finally, rates collected locally should be more available to spend locally rather than paid up to central government.
What must never be forgotten is that, for every building occupied in our town centres, comes certain extra employment. Nobody takes premises unless they need staff to occupy them. It is a complete myth to suggest that nasty landlords charging rent are the main reason why businesses close or never open. It is actually the non-payment of rates that causes most business casualties. Also the vast majority of successful building-based businesses pay substantial amounts in tax, whereas on-line retailers find it easier to exploit loopholes.
So, a commitment to reform the system needs to be kept to and the reform needs to be an opportunity to incentivise businesses to take premises. If that can be achieved, it will be shot in the arm for town centre businesses, their employees and the speed at which the deficit can be extinguished.
Watch this space!