Commenting on the Chancellor’s announcement in today’s Autumn Statement regarding business rates, Adam Rock, an associate in the rating team at Bruton Knowles in Birmingham, said:
“The whole rating system is in need of a shake up and proposals have been discussed to reform the whole system. Ratepayers are currently paying rates based upon peak rental levels set in 2008, yet we are still in a recession.
“The best way is for the Government to cease using the rates system as a cash cow and adopt real time flexibility in setting and amending business rates.
“The delay of the next revaluation from 2015 to 2017 simply doesn’t help business and there is talk that the revaluation may be deferred further to 2020. If the Rateable Values are to remain at the peak levels then the Government should reduce the UBR to an acceptable level.
“Capping any increase in rates by two per cent is a start but is not seen to tackle the bigger issue. Many small businesses receiving small business rates relief (SBRR) are still close to failure due to costs. The threshold of SBRR and indeed rates exemptions needs to increase to allow small and medium sized enterprises (SMEs) room to grow once again.
“Any incentive for the re-occupation of vacant units is very much welcomed, however, what use is £1,000 going to be in relation to a property with a hypothetical rent of £50,000?
“Landlords tend to offer on average three to six months rent free to new occupiers to allow for fit our works and the like. This would equate to £12,500 to £25,000 in rental terms, so compared with £1,000, it seems, well, pointless.”