The News today demands the government launches a complete overhaul of the business ratings system, an outdated formula which is crippling our high streets.
We are joining forces with hundreds of our sister Johnston Press titles and the British Independent Retailers Association (Bira), to demand that business rates are frozen immediately and an urgent review of the system is conducted.
Today we are asking you, the reader, to sign our online petition which urges the government to think again about an unfair tax which has been increased by nearly £700m in the past three years, leaving traders with the highest property tax bills in Europe.
Westminster’s Business Innovation and Rates Committee has looked at the issue of business rates and reported its findings in March and described the business rates system as not fit for purpose and in need of reform.
The committee called for a wholesale review including whether retail taxes should be based on sales rather than the rateable value of a property; whether retail needs its own system of business taxation; and how frequently revaluations should take place. In the interim, the committee called for a six-month business rates amnesty for businesses occupying empty properties.
The government had said it would review rates and was due to carry out a revaluation in 2015.
But this has been put back to at least 2017 and the government has made no serious or firm commitment to a fundamental review of this damaging tax.
Today, The News calls on readers to back our Shop Local campaign, which calls upon the government to do the right things for our small, independent traders.
Ashley Highfield, CEO of Johnston Press, which owns The News, said: ‘Supporting communities – and the small businesses within those communities – is at the heart of what we do.
‘We pride ourselves on the long-standing relationships we have in so many cities, towns, villages and hamlets where we are the trusted provider of local news and information services.
‘Small businesses are the lifeblood of their communities and this campaign is aimed at helping them to survive in an ever more challenging environment.
‘We support any initiative aimed at ensuring a healthy future for the small businesses that are so important to our local audiences.’
The campaign is backed by Bira, which is lobbying the government and politicians from other parties in a bid to make the process fairer.
A Bira spokesman said: ‘Business rates were designed for the retail world of 1990, but they need to work for the realities of today and be made fit for 2020. Shops in towns pay several times per square foot what other ratepayers pay in other locations and the disadvantage is hampering small shops in their fight for survival.’
The government says that it delayed the review of business rates as a review next year would have caused an estimated 800,000 businesses to ‘miss out’.
To support our campaign click here or fill in the petition on page 9 of The News today.
Business rates information
Business rates, or non-domestic rates, collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services. Up until April 2013, the rates were collected by local authorities then paid (or “pooled”) to central government and redistributed to local authorities as part of an annual grant settlement, used in part to pay for local authority services. This has changed from April 2013 with the introduction of a rates retention scheme.
How business rates are
The local authority works out the business rates bill by multiplying the rateable value of the property by an appropriate multiplier. Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs.
All these rateable values are available at www.voa.gov.uk. The rateable value of a property is shown on the front of the bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date. The VOA may alter the value if circumstances change.
The national non-domestic
There are in fact two multipliers; the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The Government sets the multipliers for each financial year for the whole of England according to formulae set by legislation. This is based on the retail price index change but for 2014-15 the Government capped the increase at 2 per cent instead of 3.2 per cent.
All rateable values are supposed to be reassessed every five years at a general revaluation, although the next one, due in 2015, has been postponed. The current rating list is based on the 2010 revaluation. Regular revaluations are intended to ensure ratepayers pay their fair contribution, by ensuring that the share of the national rates bill paid by any one ratepayer reflects changes over time in the value of their property relative to others. Revaluation is not intended to raise extra money for government.
For those ratepayers who would otherwise have seen significant increases in their rates liability, the government has put in place a transitional relief scheme to limit and phase in changes in rate bills as a result of the 2010 revaluation. To help pay for the limits on the increases in bills, there were also limits on reductions in bills.
The transitional arrangements are applied automatically and are shown on the front of the bill. More information on revaluation 2010 can be found at Valuation Office Agency
There are various circumstances under which an occupant may receive relief on a bill:
* Partly Occupied Property Relief
* Small Business Rate Relief
* Charity and community amateur sports club relief
* Rate Relief for Businesses in Rural Areas
* Discretionary Retail relief
* Discretionary Re-occupation relief
* Local Discounts and Hardship Relief
Business rates - how to check the rateable value
The council uses the rateable value provided by the VOA to work out the business rates bill. A ratepayer can check a rateable value and compare it with others on the Valuation Office Agency - Valuation Page Contact should be made with the VOA directly if there are any issues.
Autumn Statement 2013
On 5 December 2013, the Chancellor of the Exchequer George Osborne, made his 2013 Autumn Statement in the House of Commons. The statement provides an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility.
As well as some points mentioned above (in respect of SBRR, the multiplier and new discretionary reliefs), the Autumn Statement 2013 announced that;
* Appeals Backlog - 95% of outstanding business rate appeal cases will be resolved by July 2015
* Rateable values - In 2014 a consultation will look at changes to provide greater transparency over how rateable values are assessed, improve confidence in the system and allow well founded challenges to be resolved faster, preventing backlogs building up in future
* Instalment Changes - Legislation will be made to allow business rates bills to be spread over 12 months rather than 10 months as currently, with effect from 1 April 2014
* Administration Reform - A discussion paper to be published in the spring of 2014 on options for longer-term administrative reform of business rates post-2017 which maintains the aggregate tax yield.
This was published on 10 April 2014 and will look at 5 issues:
* Valuation of properties
* How frequently property is valued
* How business rates are set
* How business rates are
* What and how business rates information is to be used