“Whilst any review is welcome, the delay in the revaluation has fundamentally undermined a system that could work. Politicians meddling without any idea what occurs in the High Street has poured petrol on the fire. What is needed is for The Valuation Office Agency to carry out a thorough review of High Streets: where void levels have increased by 10% or more since 2010 should have their rateable values reduced immediately, and where turnover has similarly reduced because of this change allowances should be granted.”
“The general view is that the Government is not going to scrap rates because of the cost effective means of raising significant revenues. Therefore, our recommendation is more regular revaluations to help the High Street, i.e. every 3 years.”
Some key reasons for this are:
- Recommended on previous reviews.
- Reduces tendency for “boom and bust”, e.g. in London low rates means higher rents resulting in massive change when revaluation takes place.
- Likely to lead to less appeals.
- Easier and cheaper for VO to maintain/manage.
- Generally better for business the system would be more efficient in reflecting changes in circumstance.
Webber continued, “The biggest threat to the High Street at the moment is the rise in e-tailing, not business rates and nothing can be done about that. The document doesn’t advocate that the basis of the current system is replaced for retailers with a system based on sales (i.e. turnover), rather than a local sales tax is introduced. The tax gap in the UK for VAT is 10%+, so it would replace a very efficient tax system with an inefficient one (and other sectors would have to pick up the slack and put the prices of goods up generally). I ask, how would that help the High Street economy? Customers would just buy the same or similar goods cheaper from overseas on the internet, and ‘hey presto’, we are back to square one.”
“Instead, why not introduce a range of NDR multipliers for different classes of property (e.g. smaller tax rate for retail properties up to £50,000 RV) and introduce more frequent revaluations.”