Business rate hike for higher value properties mooted
The Chancellor Rishi Sunak is considering hike in business rates for top end non-domestic properties, according to the Daily Telegraph.
With dwindling options to grow tax revenue in the coming months, Sunak is reportedly looking at the most valuable properties to aid a coronavirus recovery.
The news, predictably, has been met with strong opposition from firms who say proposals would lead to more job losses and store closures, as well as hitting struggling retailers in wealthy city pockets such as Knightsbridge and Chelsea.
The Chancellor is said to have asked for feedback from industry experts on whether luxury shops, offices and other large buildings should be subject to a higher business rate. This is part of the wider review that is currently ongoing ahead of the autumn budget.
Currently, there is a ‘standard multiplier’ which is applied to properties with a rateable value over £51,000. Around 1.8 million small firms under that value, pay a lower rate. The current consultation is now said to be looking at ways to create additional higher multipliers for the most valuable properties which would lead to higher business rate bills.
With rebates currently being claimed because of coronavirus the Treasury is rightly worried that failure to raise enough money from business rates will put pressure on other parts of the tax system. With the “Eat out to help out” and VAT cuts for the hospitality and restaurant sector, it’s hard to pick out a part of the current tax system that will be paying its full whack this year.
With so many rumours – true or false – circulating right now, interest in the business rates’ review will only continue to grow ahead of the Budget.
London Mayor Sadiq Khan is the latest big name to call on the government to extend the business rates holiday beyond April 2021.
The retail and hospitality sectors are mobilising the troops with dire warnings that thousands of business are at risk if the rates holiday isn’t extended beyond April 2021.
The pandemic has led to more than 50,000 extra appeals being lodged against business rates by Scottish firms alone.