Following Chief Secretary to the Treasury, Danny Alexander’s, launch of the most wide-ranging review of national business rates in a generation, manufacturers are appealing for a system that is stable, predictable and supports long-term investment.
The review signifies a possible change in how businesses across England pay tax.
Launched on Monday and expected to report back by Budget 2016, the review will examine the structure of the current system which is paid annually on 1.8m 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 Britain could modernise the system so it better reflects changes in the value of property.
Commenting on the review, Paul Raynes, director of Policy at EEF, said: “Over the last few years the system of business rates has begun to evolve, with a new focus on using it to actively incentivise growth while also addressing some short-term concerns.
“As a result, a reset of the system was needed to look at all exemptions and reliefs as well as their justification. Today’s review provides this opportunity.
“Looking ahead to the outcomes of the review at Budget 2016, manufacturers will be looking for a system that is, above all else, stable and predictable.
“Certainty in tax affairs is vital for supporting manufacturers in making long-term investments, as opposed to a system that fluctuates wildly year on year.
“Large manufacturers will also welcome the inclusion of plant and machinery, which EEF has been calling for as part of the review – for capital intensive manufacturers this is the most out of date aspect of the regime.”
Alexander said: “Our system of business rates was created nearly 30 years ago. Since that time, the worlds of commerce and industry have changed beyond recognition.
“I’ve been impressed by the representations made by the business community and I know that business rates are a considerable cost.
“The Government has taken measures to help businesses by capping rates and introducing reliefs for smaller businesses. But now the time has come for a radical review of this important tax. We want to ensure the business rates system is fair, efficient and effective.
Yesterday’s announcement follows the government’s endeavours in December 2014 to conduct a review of business rates and implement a £1bn package to reduce the cost of business rates in 2015-16, with particular support for the smallest businesses.