The British Property Federation (BPF) says the current business rates regime is “unsustainable” and has called for rates to be capped at 35% of rental levels.
The latest inflationary rise of 6.7% will see business rates rise to 55% of rateable values for the 2024-25 financial year, which the federation said will add to the cost pressures already facing retail and hospitality businesses in particular.
As a result, the BPF is calling for a phased decrease from 55% to 35% and for the uniform business rate to then be fixed at that level, like other taxes.
It has called on the government to introduce annual revaluations so that the rates liability for a property reflects current market conditions and adjusts to changes in the economy more quickly, and it wants an extension to empty rates relief from three months to six months, with a 50% discount thereafter.
Melanie Leech (pictured), chief executive of the British Property Federation, said: “We have reached the tipping point where the level of business rates is no longer sustainable for businesses, high streets or for the Treasury. The steady rise in the underlying rate to 55% is out of step with the wider tax system and ignores the mounting pressure on retail, leisure and hospitality businesses that are the lifeblood of our towns and cities.
“We are urging government to take steps to cut the uniform business rate to 35%, the level at which it was introduced in 1990. We believe this will make commercial premises viable for more businesses and could increase revenues to the Treasury over time. It is the type of bold reset and long-term thinking needed to boost local economies and drive growth.”
