Budget 2017 - PwC comments on Business Rates
Published at 13:45 PM on 08 March 2017
Phil Vernon, head of rating at PwC, comments on the business rates measures in the Budget.
On help for businesses leaving Small Business Rates Relief and relief for pubs:
“The Chancellor's announcement to introduce new business rates transitional arrangements for businesses losing Small Business Rates Relief and a new £1,000 discount for many pubs is a welcome boost to small and medium sized business in London and the South East.
“However, at some point over the next five years many businesses will bear the full brunt of the large jump in their Rateable Values.
“Businesses in the north of England will also be breathing a sigh of relief as their expected decreases have not been further curtailed by this announcement.”
On relief to allow Local Authorities to assist worst-hit business:
“Local Authorities will again play a key role in helping local business through the introduction of a new relief to help soften the impact of the rates revaluation on 1 April by allocating £300m to help worst-hit business
“The new relief creates a new administrative burden for both Local Authorities and Ratepayers, and the Government will need to cut out red tape by making the relief process as painless as possible. A costly application process will add more frustration and confusion to the business rates system.
“As with many targeted reliefs, the financial assistance will be subject to EU state aid limits.”
On the case for long term reform:
“While the rating system is not wholly broken, it does need reform to ensure that rates bills are more responsive to the property market whilst continuing to provide Local Councils with stable income to ensure they can provide valuable local services.
“Today's announcements, whilst welcome, are just sticking plasters over this fundamental problem. The best way to make rates bills more responsive to the rental market is to have more frequent revaluations.”
On more frequent revaluations:
“The Chancellor's commitment to provide more frequent revaluations will present a fundamental change to how business rates operate.
"The Government tentatively set out its options for reform last year and it is likely that a self assessment option may be introduced to allow valuations to happen more often.
“It will bring business rates closer to how other taxes operate and will cut through a lot of existing red tape. However, the reform would effectively transfer the administrative
burden onto businesses, which would need to find extra resources to conduct the assessment.”
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