Any reforms to the business rates must be well thought out and transparent, a leading ratings expert has urged today (December 3 2014).
David Cureton, head of rating at Birmingham chartered surveyors Johnson Fellows, urged caution following the Chancellor George Osborne’s autumn statement.
“If any reforms are to be made then they must be well thought out and transparent for all concerned and also a cost-effective way of raising revenue,” he said.
However, the review of the business rates system would be met with some scepticism.
“Even if the Government implement any changes within its reforms, it will have to raise the equivalent of £22 billion, which was raised in the 2012/13 tax year from the 1.8 million properties that were liable for business rates,” explained David.
“One of the reasons that there has been so much unrest is that as at the antecedent valuation date of 1st April 2008, the economy was still strong and rental values were on the increase,” he said.
“When the rating list came into force on 1st April 2010 the economy was in a considerably different state, especially on the high street.
Business rates are a simple form of taxation and the collection rate is almost 100%, which is higher than many other forms of indirect taxation.”
He welcomed the increase in retail rate relief from £1,000 to £1,500 a year, which is applicable to retail properties with a rateable value of less than £50,000, and the extension of the small business rate relief of all properties with a rateable value of below £6,000, who will not pay any business rates.
The capping of business rates at 2%, which is a reduction from the expected 2.3%, is a small gesture but one that will help small businesses.
With the September retail price index announced at 2.3%, the inflation rate would give a 2015/16 uniform business rate (UBR) of 48.2p in England. The 2% cap will restrict UBR at 48.0p.
George Osborne announced in the 2013 autumn statement that 95% of appeals outstanding at April 30 2013 would be cleared by July 2015. The Valuation Office Agency is not on target to achieve this; however, it has now undertaken a recruitment programme to employ more valuers to clear the backlog of appeals.
“This is something that should have been addressed 12 months ago,” added David.
Johnson Fellows, which celebrates its 30th anniversary this year, has established itself as one of the region’s leading independent chartered surveying practices, specialising in property management, professional services, building consultancy and more recently valuation, rating and industrial agency.
Earlier this year, it took over Salway Bradbury, based in Solihull, consolidating further its reputation on both the regional and national stage.
Johnson Fellows is a commercial property consultancy established in 1984. The practice encompasses several specialist departments and acts for a variety of clients including retailers, investors, developers, financiers and occupiers of commercial property. It specialises in providing professional advice, current market information, guidance through the constantly changing laws and statutes which govern the use of property and, above all, in providing a service which seeks to achieve the optimum commercial outcome for clients. Its team of dedicated surveyors advises many of the UK’s national multiple retailers on a nationwide basis.