Time to deliver on manifesto pledge of rates review, business groups tell Chancellor

Business groups representing a variety of sectors have called on Chancellor Rishi Sunak to push ahead with business rates reform in the Budget on 11 March.

In a joint letter, organisations including the Association of Convenience Stores (ACS), British Retail Consortium (BRC) and Federation of Small Businesses (FSB) reminded the government of its pledge during the General Election of a fundamental review of the business rates system.

“It is now time for the Government to deliver on its manifesto pledge to review and reduce business rates,” the letter reads. “We welcome the measures taken to mitigate the burden of rates for some businesses by extending reliefs, but the wider rates system is in urgent need of reform.”

The letter outlines four principles to ensure a fairer, more accurate and future-ready business rates. These include:

Remove the requirement for business rates to be fiscally neutral to allow for more flexibility in the system
Businesses that invest in and modernise their business premises must not be penalised immediately with higher rates bills
Make the system simpler and reduce the burden on the Valuation Office Agency by removing the smallest businesses from the rating list altogether
Ensure that businesses are confident in the accuracy of their rates bills by reviewing the inefficient Check, Challenge, Appeal system – and ensure that the VOA is sufficiently resourced to deliver valuations and support ratepayers.

“We have set out four simple principles that will give a much needed boost to British businesses, and urge the Chancellor to take these principles forward as part of his first Budget on March 11^th,” commented James Lowman, ACS chief executive.

“The debate on business rates has gone on long enough without action to address the flaws in the system. This letter is clear that without reform, the current system is no longer fit for purpose.”

Helen Dickinson, BRC chief executive, added: “The business rates system holds back investment and contributes to job losses and store closures up and down the country.

“It is clear that any tax that punishes businesses that invest in their property is not fit for purpose. Indeed, the Government even raises rates on firms who make investments that reduce carbon footprints and save energy, such as solar panels.

“The Treasury Select Committee rightly called the business rates system ‘broken’. While we support the Government’s review of the system, it must be comprehensive in its scope, or the opportunity for real reform will be lost before it has even begun.”

Read More: Wot’s Up With the Rates?

Mike Cherry, national chairman of FSB, said: “We urge the Government to use the forthcoming Budget as an opportunity to finally tackle the issue of regressive business rates that only end up pricing small firms out of business.

“At a time when so many small businesses are desperately under the cosh, we must be doing all we can to support SMEs and a reform of the business rates system under these suggestions will go some way to alleviating the huge pressures that are burdening business.”

The organisations that have written to the Chancellor are: