Business rates have "served their time": Modernising business rates
The last 7 or 8 months have been incredibly difficult for many of our clients and business all over the UK. The limited support from many local councils and the compounding effect of years’ worth of obtuse and dark art from councils in calculating business rates have accelerated the questionable future about business rates. We certainly can’t be the only firm in the country having to answer the question: “Business rates? What do I pay that for and why so much? It’s almost as much as my rent.”
What are business rates?
Business rates are a tax on the occupation of non-domestic properties, like:
Business rates bill is sent by the local council in February or March each year.
Modernising business rates
According to the Institute of Chartered Accountants in England and Wales (ICAEW), business rates may have “served their time” and a review of property and business taxes may offer a better solution.
ICAEW outlines three areas that it believes are crucial to making the rate “less problematic” for business in the medium term.
Need for a clearer link with current market values – Many of the problems businesses face is linked to uncertainty around the cost of payment. Therefore, having a clearer link between market rents and business rates can help address this issue.
Need for more timely data – While acknowledging the government’s commitment to complete revaluations every three years, ICAEW argues that the roll-out of digital tax systems should make it possible to enable more timely maintenance of valuations.
More information about the calculation of rateable values - ICAEW believes by presenting more information about the calculation of rateable values could make the system fairer. ICAEW suggests that the government investigates whether the Valuation Office Agency could share more details about assessments, including how a valuation was calculated.
For the full article by ICAEW: https://www.icaew.com/insights/tax-news/2020/nov-2020/have-business-rates-served-their-time?utm_campaign=Members%20-%20ICAEW&utm_medium=email&utm_source=1594565_Faculties_TAXnewswire_04Nov20_JG&utm_content=Have%20business%20rates%20served%20their%20time%3F&dm_i=47WY,Y6DH,5B1MI1,4960B
Source: ICAEW and Gov.UK