Frustration amid reports of further business rates reform delays

The government is facing a backlash to fresh delays to long-promised business rates reforms, amid reports the upcoming Budget will not include significant changes to the levy. Businesses had hoped that the government would respond to a wide-ranging review of business rates at its upcoming Budget on 27 October, but that is now expected not to be included in the chancellor’s statement. Instead, Rishi Sunak will only announce minor tweaks to the system, which some have blamed for the decline of bricks-and-mortar retailers in recent years, according to The Daily Telegraph. That is despite a consultation into business rates, a tax still based on property values dated back from 2015, which has been running for more than a year. Labour’s shadow chancellor Rachel Reeves called the news “astonishing”. She said: “How much longer will the Conservatives shut out our businesses who are a crucial part of our recovery and our economy? “Labour will scrap business rates, and replace them with a new form of business taxation fit for the 21st century.” John Webber, head of business rates at Colliers, added that it was “massively disappointing”. “It is frustrating that, 18 months into a consultation which has already been delayed four times in the past year, the government is still not ready to respond to industry calls for proper reform.  “Delayed action will be a further hit to businesses – it will cost jobs and will do nothing to save the high street.” ‘Not enough time’ Long-awaited reforms were already delayed beyond this year’s Spring Budget, in a move which was met with widespread criticism in the property industry. But a government source told the newspaper that the chancellor and his team “haven’t had enough time to look at it”. Rain Newton-Smith, chief economist of the CBI, said: “With up to half of business investment potentially subject to business rates, it has literally become a tax on investment.  “If the government is serious about achieving its net-zero ambitions, kicking reforms further into the long grass cannot be the answer.” A government spokesperson said: “We’ve provided extensive business rates relief worth £16bn to support businesses and the high street throughout the pandemic, with support continuing until March next year. “We’ve also shown we are committed to supporting investment through the tax system, extending the Annual Investment Allowance increase for another year and introducing the super-deduction – the biggest business tax cut in modern British history.” To send feedback, e-mail alex.daniel@eg.co.uk or tweet @alexmdaniel or @EGPropertyNews Image © James Veysey/Shutterstock