As general election looms, Colliers launches UK business rates ‘manifesto’

Commercial property giant Colliers has introduced a 10-point manifesto as a template for the next UK government to “reform business rates and save the high street”.

“Whichever the outcome of the general election on Thursday, the new government cannot afford to continue brushing business rates reform under the carpet,” according to John Webber, Head of Business Rates at Colliers.

He says the current system providing £30 billion a year for local authority funding “is not fit for purpose” and “both political parties need to adapt their policies to encourage businesses to expand and invest rather than downsize or even close down their bricks-and-mortar estate”.

The company wants “a fair property tax that would be affordable, transparent and easy to administer”.

Its 10 key action points included addressing the multiplier, the uniform business rate used to calculate rate bills being rebased to “a sensible level that businesses can afford”. Currently at 54.6p in the £1, it’s said to be “just too high, and should be re-based to £0.35, near its historical level”.

And the government should look at ways to make up the lost revenue: ideally, Colliers says the next government would recognise that the burden of business rates “is simply too high and would cover the cost of reducing the UBR with other fiscal measures”. 

It said that increasing the digital services tax on global tech giants is an option, as well as “some form of online sales tax or local sales tax”.

It wants to see empty property rates relief extended to 12 months for all sectors, including retail, to encourage owners to keep properties in the rating list and maintain the tax base for the future. 

And it aims for annual revaluations for business rates bills to accurately reflect values, as well as improving the transparency of the Valuation Property Agency (VOA).

Other wishlist issues include reform of the appeal system as “only those companies that can afford professional advisors get to the right answer”.

It’s also calling for “a proper look at local authority financing: the government must investigate new funding sources for councils as confidence in the current system dwindles. The government should also consider reforming council tax funding, a tax that has not had a revaluation for over 30 years. A funding model similar to Non-Domestic Rates where all receipts are largely pooled should be considered”.

And dealing with the issue of rogue rating advisors by regulating the ratings industry is also key.

Colliers said a new government “has a real opportunity to introduce key reforms to the business rates system – a system which, in its current form, is not working… Over the past 30 years, various governments have over-complicated this tax, made it more opaque and increased its level disproportionately, leading to a growing chorus of criticism and contributing to destroying the high street”.
 
Webber concluded: “We need a well-managed and transparent business rates system that supports growth, not hinders it; and we need it now. That is why we have been campaigning to all parties. British business needs meaningful reform — not shallow sound bites.”