Treasury Committee will take evidence on business rates

“The Committee will take evidence on the business rate revaluation, and its effects on the economy, in its forthcoming scrutiny of the Budget, and may make recommendations for reform.

“The delay to business rates revaluations was bound to store up trouble. For businesses whose properties have increased disproportionately in value over the last seven years, the increases may be painful. There are two immediate concerns.

“First, it would be concerning if, as a result of the revaluation, large, out-of-town premises are benefiting at the expense of small, high-street firms. I will be writing to the Chancellor for the facts. Parliament needs to know the extent of this problem. 

“Secondly, the rise in the cap on annual increases for larger premises was both large and unexpected. The Chancellor has rowed back a bit. But the cap on the relief is still high. I will ask the Chancellor for the cost of restoring it to its previous level, and whether there is scope for more transitional relief.

“The longer the interval between revaluations, the larger the one-off adjustments and consequential pain for the losers. A way needs to be found to implement revaluations more frequently. It is argued that the volume of appeals has made frequent revaluation very difficult. The appeals procedure has recently been overhauled. It could turn out that the Government’s overhaul of the appeals procedure isn’t enough, or generate unfairness. But, it can’t be beyond the wit of man to find an appeals procedure that, without loss of fairness, is reasonably quick.”

--Ends--

Notes to Editors

• ·         In his letter to the Chancellor of the Exchequer, Mr Tyrie asks for information on:

• o   The number of businesses in each transitional relief category (small, medium and large properties) experiencing (a) a rise, and (b) a fall in business rates, and the average percentage rise or fall in each case.

• o   The fiscal impact of: 

• §  Limiting the maximum overall increase (the “upwards cap”) for businesses in the first and second categories (small and medium) to (a) 10 per cent, (b) 20 per cent and (c) 30 per cent over the full five years.

• §  Removing the third category (large properties) altogether (for the purposes of the “upwards cap”), so that they face the same cap as medium-sized ones.

• §  Limiting the maximum overall (five-year) reduction (the “downwards cap”) for businesses in the third category to (a) 0 per cent, (b) 10 per cent and (c) 20 per cent.

• o   The expected impact of the proposed changes to the appeals process.