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Archive for April, 2015

Business rates under the new government?

The UK Parliament was dissolved on 30 March 2015, under the Fixed-term Parliaments Act, 2011, 25 working days before the general election on 7 May 2015 and prorogued a few days before.  Generally, outstanding business from the last Parliament ceased at that stage although some Public Bills can, with consent, be carried over to the next session.  Questions asked in Parliament before prorogation will remain unanswered.

HM Treasury had issued a discussion paper on England business rates on 16 March 2015.  We wait to see how the new Parliament will treat this but we know both the Conservative and Liberal Democrat parties are committed to it.  Business rates have previously been devolved to Scotland and Northern Ireland and to Wales from this month, April 2015.

Business rates, payable on all UK non-domestic properties, are used to fund local authority services and have been much criticized.  Whilst concerns centre upon the tax being too high, particularly for small businesses, some surround the whole basis of the system.  It is a property based tax calculated upon the value of the property a business happens to occupy.  Suggestions as to an alternative way of raising local business tax include linking business rates to turnover or combining an element of property value with a measure of business size possibly calculated on the number of employees.  The last government preferred business tates to remain a tax based on property values and many people agree as it enables businesses to predict the tax payable.  However, the government recognized that the system, including its many reliefs, could be “simpler, more transparent and easier to deal with”.

The British Property Federation, speaking on behalf of the property industry, has welcomed the review.  Chief Executive, Melanie Leech, said “Modernising business rates so they are fit for the 21st century is one of the defining challenges facing the next Parliament.”  Responses to the review can be made by 12 June 2015.  We wait to see how the new government handles them but the Labour Party, SNP and Plaid Cymru have assured small businesses of assistance.