A year and a half after the government concluded its review of the English business rates system and six months since the 2017 revaluation, one would have expected the media’s unprecedented focus on this opaque tax to have died down. Not a bit of it.
Frankly, the government and its agencies have only themselves to blame. Official communication surrounding the revaluation itself was poor, fuelled by ministers’ misunderstanding of the impact.
The chancellor denied that some small firms would see rates bills rise by thousands of per cent, then quickly used the spring Budget to announce some knee-jerk reliefs when he realised the press stories were accurate. A £300m relief fund - which accounts for just one quarter of 1% of total rates revenue - has still to be fully implemented.
The rates system should not be kept afloat by the continuing application of sticking plaster reliefs, but governments have eschewed the fundamental structural reforms required by insisting that any change is fiscally neutral. Even so, rating could be much improved given the political will.
‘Muddied the waters’
From 2022, revaluations in Scotland will occur every three years based on values of one year previously.
In England, where the government came to a similar decision in March 2016, it committed to revaluing “at least every three years”, but without deciding how or when to start. It issued a ‘discussion paper’ on implementing more frequent revaluations - including the radical option of self-assessment - but 18 months later there is no progress.
There has not even been a published response to the discussion paper or a summary of the submissions received, despite my request under the Freedom of Information Act, on the grounds that “release of the responses could reasonably be expected to have a chilling effect on future engagement” with business. Really?
An ill-considered and hastily assembled new appeals system has further muddied the waters. The flaws in the ‘Check, Challenge, Appeal’ policies and processes are too numerous to be fully outlined, but systemic failings and interface issues are making it nigh impossible for ratepayers to successfully navigate.
Is self-assessment fairer? We will hopefully hear more in the autumn Budget on 22 November, but no other country operates such a system for non-residential local property taxes. Far better would be to align with Scotland from 2022 - sooner if possible.