There were no business rates headlines in the Chancellor's Summer Budget speech today, but there's a few important items of note in the accompanying Budget documents which we highlight for you below.
What can businesses expect?
- The wide ranging business rates review is to be completed by the end of 2015.
- The Government will publish a business tax roadmap by April 2016, setting out plans for business taxes (presumably including business rates) over the rest of the Parliament.
- A consultation paper on the case for a temporary rates relief for local newspapers was published - see The case for a Business Rates Relief for local newspapers.
- Further announcements were made about changes to the appeals system, which will need to be taken through Parliament in the Enterprise Bill.
- A summary of responses to the business rates avoidance consultation paper have been published - see Business rates avoidance review - discussion paper.
What will this mean for business?
All non-domestic properties throughout the country are currently being revalued, and new valuations will be effective from April 2017. Early indications are that the business rates multiplier will be around the 50p in the £ following the 2017 revaluation, so an increase in rateable value will therefore have an immediate increase in the level of rates payable.
It's also likely that the appeals system will move away from the current arrangements which allow for speculative appeals, and far more detail will need to be provided at an early stage with a managed approach and full case reviews required before proceeding to litigation. Discussion has also been had as to whether there should be a charge to make an appeal, only refundable on success.
The Government has also received evidence from the Local Government Association that business rates avoidance accounts for around £230 million, and this has confirmed their view that avoidance must be addressed. Further work on this area will be carried out before anti-avoidance measures are announced. The common areas being examined are avoidance of rates on empty buildings through artificial/contrived occupation arrangements, charity usage or insolvency arrangements.
While the Government may not go as far as a local authority general anti-avoidance rule, it's likely that there could be imposition of additional restrictions to avoid some of the current schemes.