The Budget’s changes to business rates for commercial property were welcomed by Martin Cook, Head of Rates and Lease Advisory at KWB’s Birmingham commercial property agents, but he says the changes do not go far enough to resolve the current problems in the system.
More frequent business rates revaluations, an earlier switch to using the Consumer Price Index (CPI) to calculate business rates, and the abolition of the Staircase Tax were all announced by Chancellor of the Exchequer, Phillip Hammond, in the 2017 Budget.
Martin Cook, pictured right, said: “It’s one-and-a-half cheers for the Chancellor. Getting rid of the Staircase tax is to be most welcomed, and will help those small businesses that have two separate office spaces in the same building and were facing unexpected rates bills, which will now be quashed.
“Using the CPI as the index for business rate rises – rather than the retail price index (RPI) – from April 2018, two years ahead of the planned introduction in April 2020, is expected to save businesses £2.3bn over the next three years. However, business rate rises next year will still be tied to September’s CPI rate of three percent.
“Reducing business rates revaluations from every five to every three years will help business owners cope with valuation changes which should be smaller, as should the increase in bills. However, the first three-year revaluation won’t take place until 2025, and despite transitional relief, many business owners are still struggling with higher bills from the last revaluation in April this year (2017).
“Unfortunately there was no pledge to sort out the current difficulties of the new ‘Check Challenge Appeal’ system introduced in April 2017, which makes it much harder for occupiers and their advisers to challenge rates bills, and there was no more money for the Valuation Office to deal with the estimated backlog of over 200,000 appeals.”
Business rates remain one of the most complex business taxes. For further advice and guidance on reducing your business rates, please contact Martin Cook on 0121 233 2330 or email firstname.lastname@example.org.