Business Rates

Budget Business Rate Changes Need Further Scrutiny


Today’s Budget is expected to confirm several important changes to business rates that were flagged by the Chancellor in the Autumn Statement and are aimed at helping struggling businesses, especially in the retail sector.

However, Rod Edwards, head of rating at national firm of chartered surveyors Eddisons, says that some of the measures haven’t been properly thought through and may be impractical to implement.

“To ease businesses’ cashflow, the Chancellor suggested that rates bills, from 1 April 2014, could be spread over 12 monthly instalments, instead of 10,” says Edwards. “But it would appear that the software used by the local billing authorities hasn’t been changed to reflect this and rates bills landing on the doorstep now are still based on 10 months.”

“New rates bills are due for payment from 1 April so local authorities have two weeks to sort out a revised payment plan. I can’t see it happening unless business ratepayers demand the change in payments, which is discretionary, not legally binding, and will be an administrative headache for billing authorities.”

“In relation to the £1,000 discount that retailers are being offered in their rates bills for the next two years, it is not entirely clear which businesses would be entitled to this. European Union state aid rules apply, implementing a €200,000 threshold over any three-year period. Again, this is a real headache for billing authorities with some issuing rates bills that include the £1,000 discount and others first requiring a claim form to be filled out.”

“And while the government has capped the RPI increase on this year’s rates bills at 2%, it has failed to highlight the stealth increase in the small business rate relief supplement which it has snuck in via the back door. The uplift from 0.9p to 1.1p in the £1 might appear to be small but it is none the less a further increase.”

Edwards is unconvinced about the Chancellor’s commitment to resolve 95% of the rating appeals outstanding on the 2010 Rating List by July 2015. He describes the 168,000 appeals listed at the time of the Autumn Statement as a ‘moving target’ with little possibility of them all being heard by the Chancellor’s deadline.

“Evidence is emerging that one way the number of appeals is being reduced is to drop them out of the equation. Traditionally, of the 200 or so appeals that are listed to be heard at the Valuation Tribunal at any one time, only a few will be heard in a single day, with the vast majority being postponed for a later hearing.

“Now, it would appear that increasingly those postponed appeals are simply being struck from the system – unless the appellant or their representative turns up at the hearing to formally request a postponement. That’s one way of reducing the numbers!”


Written by: Richard Roe on Wednesday 19/03/2014