The British Property Federation (BPF) has criticised the postponement of the revaluation of business rates until 2017, labeling the decision a further blow to the country’s struggling high streets.
The decision will lead to businesses continuing to pay business rates based on top of the market 2008 rents. With high street retail in particular struggling, the postponement will see these top of market rates locked in for a further two years rather than being readjusted downwards in line with today’s economic situation.
The decision also increases business uncertainty, with the fear of big changes to business rates when the revaluation does finally arrive in 2017.
Liz Peace, chief executive of the British Property Federation, said: “The decision by Government to delay the revaluation until 2017 is a real shot in the foot for the retail industry.
“A revaluation should shift the burden from those who are suffering to those who are prospering. By postponing, the government is not allowing the downward adjustment that would otherwise take place for suffering retailers.
“The postponement embeds injustices in the current system, where businesses pay top of the market rates in a depressed climate, for an additional two years at the worst possible time. With technological and other advances arguably we should be valuing more frequently, not less. That way, business are paying rates that closer reflect their circumstances.”
Jerry Schurder, head of rating at Gerald Eve, said: “This is awful news for retailers especially and it is preposterous to claim that this provides any real benefit to businesses. Business rates are already far too high and are a cause of hardship and vacancies in the high street, because bills are based upon pre-recession rents. Businesses have already waited too long for the rating system to adjust to the state of the economy and to make them wait a further two years will cause much further hardship to the economy.
“The government claims that the decision will remove uncertainty and assist future budgeting but, frankly, given the choice businesses would far prefer the early prospect of lower bills even if they could not predict the precise amount. This is a perverse decision which will not achieve the claimed benefits and should be strongly opposed.”