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UK retail property industry makes last ditch attempt at reform for ‘archaic’ business rates system
The UK retail and property sectors are poised to hear whether the Chancellor will use his final chance to make meaningful reforms to the business rates burden in his Autumn Statement, according to the British Council of Shopping Centres (BCSC).
The retail property trade body, which counts a wide range of FTSE listed property companies and town centre investors in its membership, is asking the Chancellor one last time to “press ‘go’ on reform of this archaic system.”
Recommendations include regular revaluation of retail property, more in line with the volatile nature of property values. BCSC argues this would be made practical through the exemption of all hereditaments with a rateable value of less than £12,000, which currently account for 64% of all assessments made but which only total around 6% of the income of the business tax. Further, government should commit to going beyond the current Administrative Review by reviewing the link between the business rates multiplier and Retail Price Index to ensure business rates more closely reflect economic conditions.
A move such as this would allow business rates, so long lamented for being unresponsive to the changing economy, to marry up with current property valuations that reflect market conditions. Critically, it would also serve as a tax break to thousands of small and start-up companies, offering them the chance to grow and recruit, in turn driving up employment and increasing income tax revenues.
BCSC’s submission also sets out its arguments for:
· A cap on the business rates multiplier at no more than 2%, as implemented last year.
· Inclusion of Infrastructure of Places within the National Infrastructure Plan to ensure town centres can benefit from funds available for the improvement of roads, rail and utilities.
· Commitment to retain the National Planning Policy Framework, but to further develop policy planning guidance to provide proper guidance on retail assessments, disaggregation and the definition of “significant adverse impact”.
· A plan to make better use of pooled local authority resource and ensure master plans are created to give direction to town and city centres nationwide.
· Plugging of the skills gap in retail customer service; acknowledging the sector’s role in employing three million people and providing proper careers advice and relevant skills training in schools.
“The delay to the 2015 revaluation was a kick in the teeth to our industry - the impact of which, particularly in regions outside London and the South East, the government must not underestimate,” warns Edward Cooke, Director of Policy & Public Affairs, BCSC.
“As we reach the end of the current parliament, it is time to listen to what this sector needs. The Administrative Review on business rates was a positive move, but we need government to go much further and review the way the tax rate is set if we are to see meaningful change to an outdated tax system.”
T: 0207 222 1122
28th November 2014