The Government today announced a review of the system of business rates, which have been a subject of criticism for traders in Alnwick.
The Chief Secretary to the Treasury, Danny Alexander, launched the wide-ranging review of business rates at a speech in Cambridge - paving the way for changes to how businesses across England pay the tax.
The review, set to report back by Budget 2016, will examine the structure of the current system which is paid annually on 1.8 million properties in England. The review will look at how businesses use property, what the UK can learn from other countries about local business taxes, and how we could modernise the system so it better reflects changes in the value of property.
Business rates, as well as rents, have long been a source of complaint for Alnwick traders. As recently as December last year, the closure of Greenwoods was attributed to ‘the crippling burden of business rates and rents’. And in January this year, a debate took place about the state of the town centre and its businesses after The Duchess of Northumberland made controversial comments suggesting the town should emulate Morpeth.
However, at the beginning of last year, we reported that business rates in Alnwick are cheaper than in other market towns in Northumberland.
John Cridland, CBI Director-General, said: “The current system of business rates is outmoded, clunky and regressive and it’s holding back the high street. That’s why we’ve been calling for a wholesale review of the system.
“The package of measures already announced in the Autumn Statement that will come into force from April will help ease the pressure on hard-pressed retailers.
“But this review provides an opportunity to go much further and we’ll be making the case for removing the smallest firms from paying business rates completely, linking rates to CPI rather than RPI and introducing more frequent valuations. This would go a long way to achieving a more competitive business rates regime that incentivises business investment and supports the high street.”
From April 1, the Government is increasing the business rates discount for smaller retail premises with a rateable value of £50,000 or below to £1,500 until March 31, 2016, benefiting around 300,000 shops, pubs, cafes and restaurants; doubling small business rate relief for a further year to March 31, 2016, to provide support for 575,000 of the smallest businesses, and ensuring 385,000 small businesses pay no rates at all; capping the rise in the business rates multiplier at two per cent to benefit all businesses; extending transitional rate relief to support 16,000 small business facing significant bill increases due to the ending of transitional rate relief.