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London

“We need a more fundamental review of the business rates system” says head of Rating at JLL

Tim Beattie responds to the governments review on business rates administration


London, 5th June 2014 – Businesses have until the 6th of June 2014 to respond to the HM Treasury and the Department for Communities and Local Government’s discussion paper on the administration of business rates in England. Tim Beattie, head of Rating at JLL believes that the system needs a more fundamental review.
 
Tim Beattie explains: “I strongly support the government’s laudable objectives outlined in the discussion paper to make the business rates system simpler, more transparent and more responsive to economic circumstances so that businesses spend less time on their tax affairs and more time getting on with what they do best. 
 
“I believe, however that the limited scope of the paper is a missed opportunity for a more fundamental review of the business rates system. In particular, the requirement for business rates to maintain the existing aggregate tax yield is highly damaging to business during a recession and does not meet one of the key objectives outlined in the discussion paper namely to be more responsive to economic circumstances.”
 
Tim Beattie adds: “None of the other major taxes imposed on business in the UK are restricted like this and tax yields vary in line with economic realities and I don’t believe that business rates should be singled out for different treatment in this way. My preferred solution would be for more frequent revaluations based on individual valuations combined with a fixed tax rate or multiplier that does not vary over time so that the tax yield varied with the prevailing economic conditions.”
 
Tim Beattie concludes: “Even in the absence of a commitment to remove the requirement to maintain the aggregate tax yield, I strongly believe that the government has to undertake more frequent revaluations with an antecedent valuation date one year before rating lists are published. This will ensure that fairness is enshrined into the system and that the relative tax base is aligned as closely as possible to prevailing market values.  I also think that this would enable the government to abolish transitional relief making the tax both easier to understand and fairer by ensuring those businesses that are net gainers from the revaluation process do so immediately rather than continuing to subsidise businesses that by definition are more able to afford increases in their liability.”