As Britain lurches forward to a winter General Election amidst a sea of uncertainty her government is preparing for all eventualities regardless of what political powers will form the next administration.  There are those of us who are charged with the duty to others and have the burden of leading business of all sizes going forwards, we need to plan for the future.

  • Fact:      Business rates started in 1601 and has been relied on throughout wars and turbulence to deliver a steady stream of revenue to fund government expenditure, it last major reform was 1988.
  • Fact:      Business rates is responsible for delivering £31 billion pounds to the Exchequer.
  • Fact:      Whilst other sources of taxation are volatile (corporation, income & inheritance tax as examples) – business rates delivers year on year revenue that exceeds the rate of inflation.

The Government has received the Treasury Select Committee Report on 31 Oct 2019 and representative organisations have supplied evidence.  Interestingly beyond the complaints of being a regressive system, realistic proposals have been placed, such as:-

An alternative Land Tax, by encouraging the best use of land, particularly in more valuable locations, encouraging public investment in infrastructure and linking the consequent increases in land value to revenue so investment projects could become potentially self-funding.

Proposal to cancel the forthcoming reduction in the corporation tax rate from 19 per cent to 17 per cent and reducing the business rates multiplier instead.

Introduce a 2 per cent levy on the online sale of physical goods raising approximately £1.5 billion and then use this money to fund a 20 per cent cut in business rates for all retailers.

A single consolidated tax for small businesses encapsulating Corporation Tax, Employer’s National Insurance, VAT and business rates in a singly easy-to-administer system.

What can you do now?

We do not have the luxury of waiting for a magical reform that will leave our business better off, there is a checklist to be executed now: –

  1. Register your company on the VOA portal and claim your properties.  Tax is being made digital on every front, business rates went digital on 1 April 2017 and the majority of ratepayers have not registered yet.  No registration – no ability to challenge or reduce your business rates.
  2. Have you claimed your allowances?  Government has flexed with public pressure to offer relief schemes – there are many.  Make sure you get advice on your eligibility.
  3. Are you paying by twelve monthly instalments?  Many businesses are paying on the old system of ten monthly instalments, check your rate demand.
  4. The VOA publishes your floor areas and basis of valuation, just a cursory glance may either tell you whether you are over or under assessed.
  5. The Royal Institution of Chartered Surveyors (RICS) is the gold standard of rating valuation and business rates advice – a Chartered Surveyor is uniquely equipped to give you initial advice.

Roderick Bisset of Vail Williams is a Chartered Surveyor who has practised in the field of business rates for 29 years – for further information and initial advice – rbisset@vailwilliams.com