As the Government’s Business Rates Revaluations Consultation, proposing to introduce more frequent 3-yearly revaluations, comes to a close, The British Property Federation (BPF) has submitted a response to highlight why fundamental business rates reform is long overdue and to provide recommendations for next steps.
The BPF said that the current business rates system is broken as the tax has failed to respond to significant changes in the UK economy, and that while rents in the retail sector outside of London have come down by over 50% in real terms over the last decade, business rates bills paid by occupiers have continued to rise.
The BPF has called on Ministers to set out a roadmap for moving to annual revaluations, stating that more frequent revaluations is only one of a number of reforms needed to make the business rates system fit for the future.
The Federation is calling on the Government to reset the business rates multiplier at a fairer level, abolish downward phasing (where a deduction to a business rates bill, following a revaluation, is restricted) and provide additional business rates relief on empty properties.
It called out the Government proposal in the consultation to restrict property owners’ right to make appeals where the owner is not the ratepayer, refusing to accept this proposal on the basis that property owners must retain this right.
Instead, BPF proposed that when a tenant seeks to exit a lease and leave the property, the property owner must be able to appeal to ensure the business rates bill for any new tenant is as affordable as possible to prevent challenges in re-letting the property and risk more empty properties ‘blighting’ high streets and town centres across the country.
Melanie Leech, Chief Executive, British Property Federation commented: “The business rates system is undermining town centre recovery and poses a significant risk to the future of our high street businesses. Business rates have become so unaffordable, they are now hampering town centres’ ability to adapt, modernise and thrive.
“We welcome this first step to increase frequency and transparency of revaluations, but the Government must recognise it is only the beginning of the journey to create a more sustainable and fairer system. We need annual revaluations and transparency over how valuations are determined, more frequent revaluations is only one piece to the jigsaw.
“The idea of taking away property owners’ rights to appeal is unjust – property owners have a legitimate need to interact with the rating system, including where they are not the ratepayer, and must retain this right.
“This is a vital tool that allows property owners to effectively market their properties and secure new tenants. With the number of boarded-up shop fronts on our high streets increasing by the day, this suggestion is non-sensical and demonstrates a fundamental lack of understanding or appreciation of the role that property owners play in creating thriving neighbourhoods across the UK.”