With high street retail in particular struggling, the postponement will see these top of market rates locked in for a further two years rather than being readjusted downwards in line with today’s economic situation.
The BPF, working with the British Council for Shopping Centres, had outlined to MPs that the Government’s approach to business rates risked hampering the recovery of struggling high streets. In a four-point plan to reform business rates, the trade bodies urged the Government to:
* Cancel its planned postponement of the revaluation of business rates;
* Reduce next year’s planned 2.6% rise in business rates to 2%, in line with that Bank of England’s target for inflation of 2% as measured by the Consumer Price Index (CPI);
* Review the RPI linkage to business rate hikes;
* Reintroduce targeted relief on empty property in order to increase investment in high streets and boost economic growth.
Simon Danczuk, MP for Rochdale, told the debate that "business rates are what are killing UK retail" and that the Valuation Office Agency’s "failure to run the appeals process successfully is damaging businesses, particularly small and medium-sized enterprises."
Danczuk said: "As if that were not bad enough, out of the blue, with no notice given, the Government then told us that they had decided to stop the 2015 business rates revaluation and carry it out two years later. There was no consultation with business, no detailed discussion of how the policy might affect economic growth, no consideration of how the policy might prevent the economy from being rebalanced along geographical lines. The British Property Federation’s chief executive says that the move "embeds injustices in the current system.
"Relatively, rents in some sectors and locations will rise, while those in others will fall. It is important that the rating system has an in-built review system that reflects the dynamic nature of the property marketplace. We can then be sure that the tax burden is spread fairly-that those with the broadest shoulders pay the most, and those whose business may not ! be as profitable at a particular time pay less.
Liz Peace, the chief executive of the British Property Federation, sums it up well: "A revaluation should shift the burden from those who are suffering to those who are prospering."
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