This week the Government launched a public consultation on Digitalising Business Rates (DBR), setting out and seeking views on how it proposes to connect business rates and tax information. This will impact all ratepaying businesses.
The Government committed to DBR in its conclusions to its Business Rates Review in the Autumn Budget 2021. The proposed new system would link business rates information (held by local billing authorities) to tax records (held by HMRC) and enable businesses to view a copy of business rates billing information for all their non-domestic properties in England in one place, alongside other tax information.
The government has said the new system would allow:
- opportunities to better target business rates policy, including reliefs, in the future by having access to more comprehensive data
- more effective compliance
- a better experience of the business rates and wider tax system for businesses, including the ability to better understand and review their tax liabilities in one place
It claims “DBR represents a major step towards modernisation of the system, which would tackle many of the concerns raised by stakeholders in previous consultations.”
John Webber, Head of Business Rates at Colliers said, “Whist there are some strong merits in the new proposals, in particular this might help Central Government in the distribution of reliefs and grants, it does beggar the question about the long-term role of local authority finance. At present every local authority sends out bills and collects business rates. The proposals would mean local authorities would be in effect sending out bills for Central Government or HMRC which would be taking a more controlling role in the whole process. Would this ultimately lead to business rates being part of HMRC’s overall tax assessment?”
He added, "This could also be a first step on the way to a system of self- assessment for business rates, which has long been floated.”
The work on the new scheme is being led by the DBR team in HMRC and welcomes views from ratepayers, their agents and representatives, billing authorities, and any others who have an interest in the business rates or wider tax system.