BUDGET 2017: Business rates changes in the Budget will shave just £4.5bn off a £160bn bill for ratepayers over the next five years, according to Altus Group.
The industry welcomed changes to business rates as “better than nothing” but there were hopes the chancellor would go further.
Bringing forward the switch from RPI to CPI rate of inflation measurement for rates from 2020 to 2018, will save ratepayers £266m, Altus found.
Jerry Schurder, head of business rates at Gerald Eve, said: “Let’s not pretend this is some sort of panacea for ratepayers. The UK still has the highest local property taxes in the word, which as of April will rise yet further, adding a massive £775m to rates bills.”
Tim Beattie, head of rating at JLL, said: “The chancellor has listened to industry concerns, that much is clear, but in spite of bringing it forward to 2018, we will still see bills increase by 3% next spring instead of 3.9%.
“Hammond could perhaps have been more generous to really help ease the pressure on businesses, particularly retailers, but in times like these, a small reduction is better than nothing at all.”
Further savings will come from the abolition of the staircase tax – a ruling from 2015 which means many premises, such as offices, are rateable as multiple units with higher rates.
A shorter revaluation period – cut from five to three years – was also welcomed by the industry. However, there are concerns about how it will be implemented.
Alex Probyn, president of the UK business rates division at Altus, said: “A shorter valuation period undoubtedly has benefits in terms of the speed at which value changes are passed on to ratepayers, but there is an inevitable increase in costs in revaluing more frequently.
“Government has stated that any changes must be revenue-neutral and this appears to mean that those extra costs will be passed to the ratepayer. An apparently popular option, self-assessment, is fraught with difficulties and is too high a price to pay.”
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