Business rates delay ‘surprises’ local gov committee

Government plans to give all business rates tax revenues to local authorities were delayed by the government itself, according to a new report.

The Communities and Local Government Committee’s legacy report states that they were ‘surprised’ that no Minister would give evidence until autumn last year.

Failure to put the revenue changes before Parliament before the election will see responsibility for passing the legislation passed to whichever party triumphs on June 8. Describing this responsibility, the new report states whoever wins will have to work out, “how to ensure that revenue from online businesses is captured by local government.”

The balance of business rate tax burden between online and bricks and mortar retailers has been a key issue in the April changes to business rates. These changes saw decreases for some stores while others – like Peter Wagg’s in London’s Canary Wharf, increased dramatically.

Wagg faced a 40% increase and stated to Retail Express: “The system is completely outdated, it’s not a fair way of raising money. High street shops and independents are getting stung and out-of-town supermarkets and Amazon-style warehouses are not paying.”

Business rates experts CVS earlier found that the average change for small retailers was an increase of 8.5%. Tesco’s was expected to decrease by more than £105m.

Commercial properties are normally revalued every five years, but were delayed from 2015 to 2017 in order to avoid coinciding with the 2015 General Election, resulting in a seven year gap. This action has increased the percentage change in the re-evaluations for many retailers big and small.

Both ACS and the NFRN sent open letters to the Government criticising the enacted payment changes. There is also additional concern that plans to give local councils full control over business rates and the associated tax revenues could lead to further increases.

Currently, the revenue is split between the national and local authorities, though local authorities have total control over who should receive business rates relief

Do it: Planning to invest in your premises? Be sure to check the impact on your business rate valuation. Additions such as air conditioning or extensions are likely to lead to increases.