Chancellor 'listening' to business rates fears

The Chancellor of the Exchequer, Philip Hammond, has confirmed to Conservative MPs that he is “listening” to his peers’ concerns about an impending re-evaluation of UK business rates.

Business rates are being reviewed and updated for the first time in seven years, bringing them up to speed with property values.

A number of business groups and Conservative back benchers have warned of the prospect of high street store closures with increased rates likely to leave many retailers with no choice but to stop trading.

Yesterday evening, Mr Hammond was quizzed by the 1922 Committee Tory backbench in Westminster regarding the business rates review. During the 80-minute meeting they discussed a host of scenarios of businesses in MP constituencies anticipating steep tax rises that could place their livelihoods in jeopardy.

From 1st April, the changes come into force and despite ministers stating that three quarters of businesses’ rates will either remain the same or go down, there are instances where retailers could be stung with rate rises of up to 400%.

Business rates are a tax on commercial property. The rate a business pays is calculated on how much annual rent could be charged on the premises i.e. the rateable value.

This rate is then combined with a multiplier figure that’s set each year by the Government to calculate the final bill.

Rating agents have claimed the increased business rate figures have been underestimated because they fail to consider inflation or “appeals adjustments”, the figure the government adds to its final calculations to ensure overall revenues do not fall as a consequence of appeals by firms against rating decisions.

However, this has been dismissed as “nonsense” by a spokesman for the Department for Communities and Local Government.

“This latest claim from (rating agent) Gerald Eve is nonsense – we have been clear how our figures are calculated and what they include,” he said.

“Councils and businesses can see how the revaluation is making bills fairer and is revenue neutral.

“This is yet more scaremongering, when in reality the revaluation will mean businesses in 80% of council areas will see an average fall in their business rates bills due to revaluation before inflation.”

Last updated: 21st February 2017