Editor: Some businesses can breathe a little easier following last week’s Budget. As Property Week reported, the chancellor announced that any eligible retail, leisure or hospitality business with a rateable value of less than £51,000 will pay no business rates this year.
Rates were already putting thousands of firms dangerously close to the red zone – crumbling under an unfair, cumbersome and poorly funded system.
Add an infectious disease into the mix and many questioned how they would keep their heads above water, so they will be hugely relieved that the issue has been tackled head on, and that the relief extends beyond just retailers.
It was an impressive move by Rishi Sunak, benefiting half of UK businesses in this unprecedented time of need, and a measure that he has now taken even further so all retail, leisure and hospitality businesses pay no rates for 12 months.
But the business rates system is still nonetheless riddled with issues, so the chancellor is right to promise to comprehensively address it in the autumn Budget. It is also important that the government is reviewing the system as of this month. When the time comes after this coronavirus crisis, I’d ask Sunak to consider abolishing downward transition alongside a reduction of the Uniform Business Rate (UBR). In the UK, our UBR is higher than anywhere else in the world (50p in every £1).
The system must also stop pitting local councils against retailers by re-evaluating empty business rates relief; cutting ties between rates and government state aid; making sustainability measures (such as solar panels) exempt from rateability; and providing the VOA with more funding.
Sunak’s first Budget is welcomed but, when we can, it is paramount that we review the system – or risk more retailers going under and the chancellor’s promises of economic security falling short.
Martin Davenport, partner and head of business rates, Hartnell Taylor Cook