Business rates / 06 October 2015

BBPA comments on proposals for Business Rates reform

The BBPA has commented on the Chancellor’s proposals for Business Rates reform announced at the Conservative party Conference.

The new proposals will see local authorities keeping all of the money generated through business rates, a total of £26 billion. The Uniform Business Rate (UBR) will be abolished and local authorities will be permitted to reduce the rate to a level they feel is appropriate for their local area to generate local business investment. For those areas with an elected mayor a surplus of up to 2p for each pound of rateable value could be added to fund investment, if local businesses support the plan.

The BBPA believes that this proposal could see business rates fall in more affluent areas and where local authorities are actively looking to encourage growth. This gives an opportunity for the BBPA and the wider industry to work constructively with local authorities to support businesses. There is a concern that some local authorities will lose out from this move and therefore look to raise funds through other measures.

As part of the wider review Government needs to look at how to include a wider range of businesses within the business rates regime to spread the burden more evenly across the economy. The BBPA will also be pushing for appropriate reliefs to be expanded to reduce the rates bills of pubs in the sector.

Brigid Simmonds, BBPA Chief Executive, comments:

“We will be looking at the details but at present, pubs pay 2.8 per cent of all business rates, and account for just 0.5 per cent of turnover. For pubs to thrive, they need support from local authorities to ensure that pubs, which are so important to their local communities, receive support.

“For some time local authorities have had the ability to use discretionary relief to help local businesses, but most only use it (if at all) for new businesses to help them become established. Almost none has been used to help pubs. Most pubs have been operating for decades or hundreds of years and whilst local people value them, I am not sure that their support is always backed by the local authority.

“Much work will need to be done on the detail of this new policy and we have no timetable for its introduction. In the meantime BBPA will be concentrating on asking the Chancellor to freeze business rates in the Autumn Statement, continue retail relief (currently £1,500 for retail properties with a rateable value under £50,000) which helps 75 per cent of pubs, continue Small Business Rate Relief and review Rural Rate Relief.

“If the Treasury insists on raising the same total sum after the revaluation in 2017, some pubs will find that their business rates bill rises. There is a real need to look at how other businesses, such as those who operate online can contribute through the business rates system – at present, pubs are operating at a real disadvantage and paying far more than they should.”

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