Business rates deferment will cost the Midlands and North £2.3bn – Bilfinger GVA

THE Government’s two-year deferment of the business rates revaluation to April 2017 will cost businesses in the Midlands and the North of England £2.3bn, according to new research by property consultancy Bilfinger GVA.

Its review calculates what the 2015 revaluation would have looked like if it had taken place when it was originally due on 1 April 2015 and compares this to what businesses will instead have to pay over the course of the deferment.

Current rating liabilities are valued against the backdrop of the market in April 2008. As a result, many people suggest, the current rating system has become badly disconnected from the economic landscape, and has left business crying out for changes to create a fairer environment.

Commenting on the review, entitled April Fools’: The rating revaluation that never was, Graham Knight, a director in the firm’s business rates team, said: “The Government has responded to growing calls across the business community for what it terms a ‘root and branch’ reform of the business rates system.

“However, it is important to remember that the Government is committed for any changes to be fiscally neutral, so any major reforms to the system will still create winners and losers.

“The Government is very much responsible for much of the controversy over the current system for delaying the revaluation from 2015 to 2017. Our research clearly highlights the regions and sectors that have paid the highest price for the delay.

“By switching to a CPI-linked system, committing to more frequent valuations and scrapping downward transition adjustments from 2017 for those businesses that have been hardest hit, any future Government could make huge strides towards redressing the imbalances in the system, and reducing an increasingly disproportion burden on growth and job-creating enterprise.”