A year of change
This year the business rates system has given the Government the ability to implement a massive package of financial relief across the retail and leisure sectors and for small businesses.
The ease by which it has been possible to identify and get grant funding to those most in need is one definite positive for an otherwise rather problematic and seemingly unfair tax for many ratepayers.
The lack of measures to assist the industrial, office, education and other specialist sectors this year is certainly one such negative. As is the fact the Government have postponed the revaluation that had been planned for April 2021 and would have seen properties’ rateable values aligned to rents in 2019, as opposed to 2015 as they presently are.
It could be said that Rishi Sunak also missed a trick in not announcing measures to roll some form of relief into the next tax year for the retail and leisure sectors when he gave his Spending Review in November. He did however commit to freezing the rates multiplier in 2021-22, so that it will be the same as this year for all businesses.
From a technical perspective, decisions from the Court of Appeal and Supreme Court have meant there are ever evolving technical considerations to be made when reviewing the options to mitigate liabilities.
What could be around the corner?
A system that has roots going back to the 16th Century and has been in existence in its current form for the last 30 years, could be seen to be so good it hasn’t needed drastic modification. On the flipside, it may be incredibly outdated.
Modern technologies, online sales and changes in the way businesses occupy commercial property does mean that some form of modification is needed and the pandemic has resulted in even greater pressure on the Government to make changes that level the playing field between high street and online retailers.
They committed to conduct a fundamental review of business rates some time ago and published the terms of reference for the review at the Spring Budget. Having gone through the process of a call for evidence, the review is due to conclude in Spring 2021.
Whether this will signal the death toll for business rates in its current form or will simply result in a simplification of the current myriad of reliefs, exemptions and closing of loopholes is yet to be known. It is almost certain that if any radical changes are determined it will take a number of years to implement them.