Government in u-turn after ministers abandon plans to tighten business rate appeals

 

The Government was forced into an embarrassing U-turn as ministers scrapped plans to make it harder for firms to challenge their business rates bill after the policy was opposed by High Street organisations.

Last month, former High Streets Minister Brandon Lewis claimed that too many businesses were abusing the appeals system and promised to tighten it.

But business leaders said there were so many appeals because the Government delayed the standard, five-year revaluation of all business premises from next year to 2017.

Many poorer regions feel the delay is unfair because the rates calculation is based on the value of the land from 2008.

They argue their values have fallen, making their rates bill artificially high and subsidising Bond Street and Regent Street, where rents have soared but rates remain low.

Today in a letter to industry bodies, seen by The Independent , the Government explained why ministers caved in to pressure.

It said: “Having listened the Government has decided to fold the consideration of reform of the business-rates appeals process into the broader review of business-rates administration, which is considering longer-term reform taking effect after the next revaluation in April 2017.”

The letter also noted strong opinions about business rates generally and appeared to recognise how big an issue it had become for the High Street.

Bill Grimsey, Labour’s High Street adviser, said wider reform of the Valuation Office Authority, which carries out the valuations, is needed.

He added: “It was a farcical idea and I’m not surprised that businesses told the Government it was a non-starter. This is creating a huge amount of uncertainty, not only for business but also for local authorities, which are more reliant on business rates income than ever before.”

Retail campaigner Paul Turner-Mitchell added: “Businesses are fed up with seeing their bills going up when they know it has no bearing to how their business is performing.”

The British Retail Consortium, the Confederation of British Industry and the Federation of Small Businesses all wrote to the new High Streets Minister, Penny Mordaunt, who has since replaced Lewis, opposing the plans. The BRC has also commissioned its own work with Ernst and Young to suggest ways of reforming the rates system.

The Government has so far refused to make any changes until it carries out a review in three years’ time.

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