Paul Nash, Regional Head of Rating, said: “Whilst this review is welcome, the postponement by the government, in autumn 2012, of the next Revaluation for two years means that needed change cannot be delivered before April 2017.
“It would be much more equitable for businesses around the country if the government was to re-assess rates on a more frequent basis, and to remove the imposition of full rates on empty commercial and industrial properties.
“Until we move to a fairer system for all businesses, this announcement could be too little, too late.”
Mounting financial pressure for businesses
Colette Henshaw, Associate Director of Rating in LSH’s Manchester office, added: “Whilst there is recognition for change, this does not go far enough to abate the mounting financial pressures businesses face in meeting this tax demand. This pressure is felt most by small to medium sized businesses based in and around regional cities.
“Measures announced to ease these pressures comprised the doubling of small business rates relief, a capped two per cent increase in the multiplier used to set the uniform business rate, an increase in the high street discount for 300,000 shops from £1,000 to £1,500.
“These measures are a small offering and are not enough to reduce the burden felt by the majority of businesses. In particular the commitment by the government to cap increases at 2 per cent still utilises the RPI and not the CPI index.
“Undoubtedly it would be a fairer system if more frequent revaluations were adopted. This would allow for a truer reflection of the commercial property market and a more reasonable representation of rental values.
“The current system holds the business rate payer to ransom, paying tax reflective of values based on a snap-shot of the commercial property market as at April 2008. The majority of businesses are still left with the burden of paying a tax pegged to rental values largely set in the height of the economic market.”