Responding to the Non-Domestic Business Rating Bill, announced today, Martin McTague, National Chair of the Federation of Small Businesses (FSB) said:
“Today’s legislation makes good on useful moderate changes promised to the business rates system in England. However, overall the proposals are necessary but not sufficient.
“Moving to more frequent revaluations will prevent the existing problems of the tax system falling behind the economic situation at the time, with the Government piling on CPI inflationary increases each year in between revaluations. The aim now should be to move the system to an annual assessment, requiring significant modernisation of the Valuation Office Agency.
“FSB campaigned strongly for net zero and other investments by a small business into its premises to be exempt from business rates, to avoid the perverse disincentive of increased bills after doing the right thing. So we are also really pleased to see that set out, today.
“However, the 2019 Manifesto commitment to hold a fundamental downward review of business rates has not happened. And as a result, these changes do not amount to the fundamental overhaul the system needs, to reduce the chilling impact of a regressive tax that you pay before even earning a penny in turnover, let alone profit.
“After Brexit, COVID and the energy crisis taking up Ministerial bandwidth, there are no more excuses and we want to see this review delivered, as promised, before the end of this Parliament.
“As Secretary of State for Levelling Up, we are asking Michael Gove to see the local economic benefits of cutting business rates, to unleash a local economic growth dividend across the country as businesses in our communities are freed up to invest, recruit or expand. The best way to do this would be to increase the threshold for Small Business Rates Relief and Rural Rates Relief to £25,000, removing thousands of small businesses out of the bottom of the tax altogether.”