This Budget presented the Chancellor with a real opportunity to offer a lifeline to business by taking immediate steps to reduce the burden of business rates. Whilst his focus was understandably on COVID-19, as one would expect in the current climate of economic uncertainty, he did not overlook the current burden of business rates and especially in respect of the retail and leisure sector in particular .
Whilst we welcome the changes announced today, which will go some way to helping a targeted group of ratepayers seen as being most acutely affected by the negative effects of the current outbreak, these measures are temporary and it is disappointing that he has not been bold enough to deliver measures that will help all ratepayers in general. Much hoped for announcements around an immediate reduction in liability across all ratepayers or an undertaking to swiftly deal with downwards phasing, for example, failed to make an appearance.
The promise of a fundamental review of the rating system, to be concluded by the Autumn statement, does little more than kick the can down the road when rate bills will arrive on the 1st April. And this review is the latest in a long line of similar consultations. The Treasury Select Committee has already spent the last year undertaking their own in-depth review of the impact of business rates on business and their detailed report set out in clear terms their own recommendations for much needed reform but these broadly been dismissed by government as recently as last month.
The Chancellor’s announcements today included:
- Increasing retail relief to 100% for properties which have a rateable value below £51,000.
- This retail relief will be expanded to bring a wider range of retail, leisure and hospitality businesses into scope. Exact details to be confirmed shortly
- Business who benefit from Small Business Rate Relief, will be given a cash grant of £3,000 per business.
- Promise of a fundamental review to be concluded by the Autumn Budget.
Whilst these announcements will provide welcome relief to a number of ratepayers and small businesses, the Chancellor failed to mention that these reliefs will continue to be subject to EU state aid limits and, in reality, they will offer very little help to many national retailers.
And one can go further – these reliefs can be taken to be a tacit admission that the rating system simply isn’t set up to cope with such shocks to the economy and it seems clear that Chancellor has acknowledged the deficiencies of the system. One could of course ask whether the rating system should be able to do so at all or whether the stability of local authority funding is seen to be more important.
I look forward to inputting into the fundamental review in my capacity as President of the Rating Surveyors' Association and we as an Association will play our part is creating a rating system that is fit for purpose.