The new Treasury Select Committee (TSC) Chair, Mel Stride MP, was quick off the mark and used his first few weeks as Chair to publish the long overdue report from the inquiry into the impact of business rates. And the impact of CBI submission can be found throughout the report. Amongst the recommendations we made earlier this year, the Committee adopted the following:
- The Ministry of Housing and Local Government (MHCLG) should work with all billing authorities to provide clarity on discretionary reliefs
- The government needs to ensure business rates align with its aim to boost productivity and do not undermine its intentions to encourage businesses to invest in energy efficient technology and better data connectivity
- The government should look at where case law currently stands on what assets are included in rateable values to ensure that businesses invest in green assets such as solar panels or energy efficiency machinery
- The Valuation Office Agency (VOA) should increase transparency on the data that is used for revaluations.
Next to the recommendations, there was also a welcomed acknowledgment of the burden the current regime poses for businesses of all sectors and sizes and that it is no longer fit for purpose. It also adopted the argument the CBI has been making for the past few years, that in its current form it disincentivises investment. Another key strand of the CBI submission was the international comparison of the tax and in particular that the regime means the UK has one of the highest levels of property taxes in the OECD. Finally, the Committee acknowledged that, having not been reviewed since 1993, the scope of plant and machinery is outdated.
Some good news then, and while the General Election means we have to wait a little longer for a budget to see some significant change to the tax, the report adds to the growing evidence base arguing that the business rates regime in its current state is unsustainable. It also means the Treasury Select Committee is now on the long list of stakeholders and businesses calling for urgent reform.
Read the CBI Autumn Budget, which put forward a comprehensive package of reform the business rates system, here.
If you would like to join our Business Rates working group or would like any further information, please contact Megan Bulford.