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The Autumn statement by Chancellor Rishi Sunak this Wednesday (27 October) is seen as a crucial point in the reform process.
John Webber, head of business rates at property specialist Colliers, said that reports that the Chancellor will be merely “tinkering around the edges” of the system would, if true, “be an affront to the business and cost livelihoods and jobs”.
The business rates system is vital to government as it provides £26bn a year for local authority funding.
Colliers said in a statement that it needs a proper reform “because the current system is unfairly skewered against the retail sector who pay nearly one third of the tax”.
Unaffordable business rates have been cited as one of the main reasons for the decline of high streets in recent years.
Webber said: “All the experts in the industry agree the system in current form is unworkable, and we have been clear on the areas that should be reformed.”
Webber’s recommendations include business rates being lower; that the burden should be shifted away from the physical retail sector and take account of online retailers; that there should be more frequent re-valuations – ideally every year; and that the Valuation Office Agency, which administers the business rates system, should be better funded to deal with more frequent valuations.
More broadly, he suggested that the government needs to look local authority financing, so that the funding stream for local government services is protected.
Extra cash could be obtained from various sources, said Webber, including an online sales tax or a tax on delivery charges and a digital tax on the global tech giants.
