Manifesto For Change Our 5 point plan adopts both a pragmatic and realistic approach to the reform of the business rates system, having regard for the deficit whilst delivering key Government policy objectives of reducing the burden, levelling-up and building back better.
Delivering the Cut The continuation of indexation, the annual increase of the multiplier, even at the lower CPI measure of inflation, will ultimately lead to more paid in property taxes than in rent, culminating in the tax rate eventually exceeding £1, an effective 100% tax rate on open market rents at the Antecedent Valuation Date. That just isn’t sustainable. Permanently removing annual inflationary rises would result in business rates becoming more predictable and sustainable. It is a deliverable, meaningful reform which can be funded by supporting and incentivising growth.
Levelling-up Removing downward transition, which could be funded by a small supplement on all bills, would result in an immediate tax stimulus for depressed regions where the effects of the 2023 Revaluation are likely to be far more pronounced. The measure also avoids compounded downward transition for those in transition for the whole of the 2017 List who have never reached their true liabilities. Asking underperforming sectors and regions to pay more in tax to help subsidise those better faring economies simply does not support the ambitious desire to “level-up” the fortunes of struggling towns left behind - nor does it satisfy the principles underpinning any system of taxation, fairness and supporting growth.
Build Back Better A green energy pledge promising to “build back better” post COVID-19 can be delivered by providing clear and sustainable tax policies through financial incentives to reduce environmental damage. Businesses need a degree of certainty that the investment they make to reduce that damage will be worthwhile. The business rates system should be leveraged to stimulate investment in energy efficient and carbon abatement solutions. Where a business adopts sustainability within their process to reduce their carbon footprint it should be for the benefit of the planet not the public purse. It simply makes no sense to continue to penalise businesses for lowering their emissions.
Accelerate Appeals Business rates appeals must be expediated through shorter targets for resolution. Once a Check has been accepted under the CCA regulations and passes to the Challenge stage, 18 months is allowed in law for a response before a business can take their case to the Independent Valuation Tribunal. The VOA already has a target to respond to 90% of Challenges within 12 months, but the statutory provision should be changed to reduce the maximum response time from 18 months to 12 months. This should accompany a stretch target of 9 months for 90% of Challenges, requiring a combination of more resource and better deployment of existing resource.
Realism Empty rates must be modernised. The proliferation of e-commerce, shifting consumer preferences, high street cost pressures and the impact of the pandemic have all led to an increase in empty properties. The current 3 and 6 month exemption periods are woefully inadequate to allow commercial properties to be refurbished and/or repurposed, marketed and re-let.
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