Government’s pledge for radical structural review of business rates system in doubt

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Business rates expert - Paul Turner-Mitchell

The Government’s pledge of a radical structural review of the controversial business rates system has been thrown in doubt.

A full 'structural review' of the unpopular business rates system in England was announced by Chancellor George Osborne in December 2014.

The review was set to examine the 'complete structure' of the existing system, which has been in place since 1988.

The commitment was reiterated in the Conservative Manifesto which stated that they 'will conduct a major review into business rates by the end of 2015 to ensure that from 2017 they properly reflect the structure of our modern economy'.

However, despite the Government’s commitment to structural review of the system, Rochdale-based business rates expert Paul Turner-Mitchell says that the Government’s agency, Valuation Office Agency, is simply preparing to implement a long standing revaluation of properties due for 2017 in accordance with existing legislation.

Mr Turner-Mitchell says that this year the Government’s Agency is set to spend £26million revaluing properties in England and Wales based upon the current system.

Under a Freedom of Information request, the Valuation Office Agency also confirmed to Mr Turner-Mitchell that 'the Government’s structural review of business rates has had no effect on the revaluation for 2017'.

The request also shows that the Government’s agency has already revalued 446,000 of the 1.8million properties in England.

The former Chief Secretary to the Treasury, Danny Alexander, in March, launched the most wide-ranging review of national business rates in a generation – paving the way for changes to how businesses across England pay the tax.

Mr Alexander said: “Our system of business rates was created nearly 30 years ago. Since that time, the worlds of commerce and industry have changed beyond recognition. I’ve been impressed by the representations made by the business community and I know that business rates are a considerable cost.

"The Government has taken measures to help businesses by capping rates and introducing reliefs for smaller businesses, but now the time has come for a radical review of this important tax. We want to ensure the business rates system is fair, efficient and effective."

At the Conservative Party conference George Osborne announced his plans for his 'devolution revolution' saying in 2020 that he would allow councils to retain all of the business rates they collect with additional powers to lower the tax and fund infrastructure projects through a levy for those with an elected mayor.

Mr Turner-Mitchell said “The current system does not ebb and flow with the economy. I wanted to see meaningful review and change for business rates. The end of unfair transitional relief. Removing the smallest of properties completely out of business rates. More frequent revaluations. This list goes on. Is there a desire for this now?”