BUDGET 2016: The property industry has reacted positively, if cautiously, to the government’s cut in business rates for small firms.
The government claims that the cut will save each of the 630,000 UK small businesses affected around £6,000 every year.
David Jones, head of business rates at Bilfinger GVA, said: “It is clear that government has listened to business, moving to more regular revaluations, at least three yearly. This will ensure a much greater connectivity between commercial rateable values and the performance of the economy, removing the significant imbalances from less frequent revaluations.”
John Webber, head of rating at Colliers International, said: “It’s only when rateable values are published in September 2016 that will we know whether businesses will be better off. It is too early to say whether the move to CPI and changes to small business rates relief are going to offer the actual reductions that Osborne claims.”
Jerry Schurder, head of business rates at Gerald Eve, said: “This is a very positive move and will be welcomed by the SMEs that have been particularly hard hit by excessive business rates bills. The doubling of the threshold for 100% relief and the fact that it has finally been made permanent is a massive boost to small firms after many years of their cries for help falling on deaf ears.”
Gerry Biddle, business rates consultant at Deloitte, said: “We welcome the news that the government will aim to introduce more frequent business rate revaluations and will publish a discussion paper this month on this topic.
“More frequent valuations, at least every three years, are needed in order to align business rates closer to the current economic landscape. Current business rates are based on 2008 property values, and a new rating list will not come into force until 2017.
“These valuations are outdated, disproportionately benefiting London-based properties, which have seen values rise rapidly since then. By contrast, the varying fortunes of secondary shops and offices throughout the country have caused these occupiers to struggle with business rates set at the height of the boom before the financial crisis.”
Melanie Leech, chief executive of the British Property Federation, said: “We welcome the suggestion of more frequent business rates revaluations, which we have long advocated. Frequent revaluations maintain fairness for ratepayers, who should expect to be taxed in proportion to the economic benefit that they derive from their property. We are glad that it looks like the government is finally taking this recommendation on board.”
Ezra Nahome, chief executive of Lambert Smith Hampton, said: “In hindsight, this was predictable given the residential stamp duty reforms that were announced in last year’s Autumn Statement. Of more concern is the timing of today’s announcement.
“In the past, reform to commercial property stamp duty has been introduced at a time when the market has been buoyant, so investors have been able, albeit grudgingly, to absorb the extra costs. At the moment, however, investors are already concerned about the outlook for the global economy and the uncertainty caused by the referendum on our continued EU membership. Even if one believes that the commercial property sector is fair game for taxation, this is not the right point in the cycle to be trying to extract more tax receipts from investors.”
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