Budget 2020: KICK IN THE TEETH FOR LARGE BUSINESSES AND MAJOR EMPLOYERS AS GOVT CONFIRMS YET ANOTHER REVIEW INTO BUSINESS RATES

“THIS CHANCELLOR DOESN’T GET RATES DONE” says Colliers

Rating experts disappointed Chancellor fails to grapple with the key issues of business rates reform despite expert recommendations

Wednesday, March 11^th 2020.

The party of Brexit is still happy to sit behind state aid rules as the country faces an ‘economic Battle of Britain ‘ according to John Webber, Head of Business Rates at real estate advisors Colliers International.

Webber believes the announcements by the Chancellor concerning business rates do nothing to alleviate the fundamental problems with the current system and merely delay proper reform, kicking it into the long grass.

Key measures in the package for revitalising high streets and helping smaller businesses, many that will be impacted by Covid-19 include:

• Extending the retail discount on business rates from 50% to 100% for next year, for those retail businesses with a rateable value of less than £51,000. This would effectively abolish business rates for these smaller businesses in the year ahead.
• Extending this 100% discount to include retail, leisure and hospitality venues
• Promising a review into Business rates reform for the longer term- to report in the Autumn
• Increasing reliefs to pubs, who already receive a £1,000 business rates relief- designed to help them stay as vital centres of their communities

However, as John Webber comments, “Whilst helping SME’s is to be applauded, there is nothing in the Budget that tackles the issues of the larger businesses – and these are the ones shedding the jobs.”

“Without helping larger businesses on business rates, the silent majority is side-lined yet again.”

Webber also points out that State Aid rules, as they stand, currently remove all but the smallest businesses from the Government’s help.

“Instead, Business Rates Relief under s44A LGFA 1988 should and could have been used for underused buildings – if funded by Central Government this would not be subject to state rules therefore would help all businesses, providing a much more targeted and valuable relief for those hardest hit by the oncoming economic storm.”

“And promising “yet another” review of business rates, to be heard in the Autumn, seems non-sensical when the issue has already had a detailed review and the Treasury Select Committee gave its recommendations last November, many of which appear to be ignored. One wonders what was the point of all the expenditure in time and money, if we are purely to review again.”

Webber concludes, “This Government claims it is the Government to “Get Things Done”. This is not “done” in my book. Yet again another trick has been missed in the chance to get some proper reform.”

” Unless business rates are properly reformed, as recommended by the Treasury Select Committee, these plans will do nothing to counter the impact of the 2017 business rates revaluation and introduction of downward phasing and simply won’t go far enough to help retailers struggling with their current rate bills. We are now destined to see more shop closures and job losses in the high street in the months ahead.”