Business rates regime needs to carefully consider the competitiveness of UK plc

ACCA (Association of Chartered Certified Accountants)

The Chancellor has an opportunity at the Spring Budget to reshape the future of the business rates system in England in order to prevent the catastrophic consequences for UK businesses of the planned revaluation measures due to come in to effect this April, says Chas Roy-Chowdhury, head of tax at the Association of Chartered Certified Accountants.

Mr Roy-Chowdhurysaid: “Linking the business rates regime to current property valuations - as outlined in the Government’s business tax road map - may seem at first glance to be a sensible proposition but actually requires careful consideration particularly given that ratable values have not been adjusted in almost a decade. The Government should ensure that this is not introduced at the expense of the competitiveness of UK plc as a place to work and to locate a business.

“The system also needs to take account of fairness when some high-street shops will be hit by hikes of over 400% on current rates, while online retailers will see rates cut in many instances.

“For many of the productivity-boosting SMEs up and down the country, increases will eat into disposable income which could better be spent on investment, recruitment or research and development. This is particularly important given the low levels of confidence following the result of the referendum on the UK’s membership of the European Union and looking ahead to the longer term effect of the devaluation of sterling in increasing supplier costs.

“The Government should revisit these proposals and carefully consider if the revaluation is the best way to raise revenue from the UK’s thriving small and medium sized businesses in an era of high uncertainty for the future.”