The UK government has once again announced a delay in its business rates revaluation, sparking concerns among property specialists who are pushing for a complete overhaul of the taxing system. Business rates pose a significant burden for physical stores, especially those located in city centers like London’s bustling Oxford Street. With the revaluation postponed until 2023, businesses will continue to operate based on outdated property valuations that do not accurately reflect the current economic landscape shaped by the pandemic.
Initially planned for 2021, the revaluation has been pushed back to 2023, leaving businesses to pay rates based on assessments from as far back as 2015 once temporary relief measures from the pandemic are lifted. This means that the current rates are based on a pre-Brexit, pre-online shopping, pre-pandemic era, which fails to capture the significant changes the retail industry has undergone.
While the delayed revaluation will feature lower rates based on data from April 2021, the complexity of business rates relief schemes can lead some companies to pay more than necessary. John Webber from Colliers International suggests adjusting the rating list to reflect the impact of Covid-19 and stresses the importance of a fair system that accurately represents the current reality.
Looking ahead to April 1, 2021, when the effects of the pandemic will likely still be felt, there is potential for a reduction in government tax revenue or the implementation of additional relief schemes beyond 2023. Webber recommends the government consider reducing the multiplier on business rates, acknowledging that current rates are burdensome and may not be sustainable in the long run.
In light of these challenges, it is crucial for the government to address the pressing issues surrounding business rates and make necessary reforms to support struggling businesses impacted by the pandemic. Taking into account the economic realities of today, the government must work towards a fair and sustainable taxing system that promotes growth and prosperity.
For more information on business rates in the UK, visit this link and to explore options for business rates relief, check out this resource.
