Cohen provides comments to LexisNexis on British Retail Consortium call to freeze business rates multiplier

August 20, 2019

Summary

The below article was published by LexisNexis. Click here to read the full article.

The British Retail Consortium (BRC) has published a letter from over 50 high street retailers to Chancellor Sajid Javid that calls on the government to put business rates at the centre of Boris Johnson’s promised new economic package. The letter has been signed by CEOs of supermarkets, food-to-go, fashion, homeware and department store retailers and addresses the fact that the retail industry accounts for 5% of the UK economy, but pays 10% of all business taxes and 25% of business rates. The letter, among other things, recommends a freeze in the business rates multiplier to help address the challenges posed by business rates. Roger Cohen, partner at Bryan Cave Leighton Paisner LLP, says that this proposal ‘goes to the core of the issue’ and that ‘all is not well in the world of business rates.’

The recommendations made are:

  • a freeze in the business rates multiplier
  • change transitional relief—this can currently result in retailers having to pay more than they should
  • introduce an improvement relief for ratepayers
  • ensure that the Valuation Office Agency (VOA) is fully resourced

Cohen believes that a reduction in the business rates multiplier would deal with two of the recommendations in one go: ‘A tax on the value of a property to its occupier, levied at over 50p in the pound is doomed to reveal all the stresses and strains in the system. A reduction of the multiplier to say 33p in the pound would at a stroke dispense with the BRC’s case for improvement relief. This from the BRC who rightly complain that the system relies on a mishmash of reliefs.’

Additionally, Cohen agrees with the BRC’s call to make sure that the VOA can do its job properly: ‘The VOA’s work load is massive. It is dealing with appeals that date back to before 1 April 2017 when the current list came into force. Appeals against assessments in the current rating lists are few and far between. But that is not a good thing.’

‘The derided check challenge appeal process for challenging business rates assessments from 1 April 2017 is not working efficiently. The result will be a tidal wave of appeals in 2020 and up to 1 April 2021 when the next list comes into force. It is the same VOA that must revalue all rateable assets for the 1 April 2021 list.’

Cohen concludes by saying that action needs to be taken: ‘For local and central government, the VOA and ratepayers themselves and for the public at large, the system needs reform at all levels. The comments by the BRC today, and also the compelling evidence from other retailers and specialists to the Treasury Committee, leave no shortage of policy options for the Chancellor to adopt.’

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