11 June 2018
Marcus Andrews of Goadsby says that official figures shows that the retail sector was denied business rate reductions worth £584 million for the 2017/18 financial year, and that in 2018/19, they will miss out on a further £352 million of tax relief, because of the way the Government phases in business rate changes.
In April 2017 business rates were revalued for the first time in seven years to reflect changes in the property market. Many Ratable Values (RV’s) fell in the BH & DT postal areas.
As the re-valuation across England & Wales left many firms facing huge tax hikes in places such as London, then to help them manage the rise, the Government set up transitional relief system to phase in the increases.
However, as the phasing in has to be ‘neutral’ in terms of Government Tax receipts, then the phasing in of reductions also has to apply. The scheme has backfired as it prevents firms operating in areas with declining rents (& thus RV’s) from claiming the full value of the business rate reductions straight away, that they would otherwise have been able to get obtain.
Marcus Andrews of Goadsby said "Transitional relief needs to be changed to cope with the crisis on the High Street. Phasing in of a change should not apply to any RV that has gone down, only to bills that see an increase at a re-valuation”.
“Local economies are struggling, so ratepayers need to benefit from the full reduction immediately on this property tax. The Government needs to fund the loss of income from other sources” says Marcus Andrews. “It would not be impossible to re-issue all the bills for 2018/19 that do have phased reductions: the cost to local Councils of those bills also needs to be funded by the central Government”
Should you require any further information or advice please feel free to contact Marcus Andrews FRICS on 01202 550140 or email: firstname.lastname@example.org.