I am today announcing the government’s intention to postpone the next business rates revaluation in England to 2017. Primary legislation will be brought forward through the Growth and Infrastructure Bill which will shortly be laid before Parliament.
Business rates are the third biggest outgoing for local firms after rent and staff costs. This decision will avoid local firms and local shops facing unexpected hikes in their business rate bills over the next five years. As business rates are linked to inflation, there will be no real terms increase in rates over this period. This reform will provide certainty for business to plan and invest, supporting local economic growth.
Since the last revaluation (based on 2008 valuations), the economy and property market have faced exceptional changes. A revaluation at this point would be likely to result in sharp changes to business rate bills in many parts of the country and in many sectors. Tax stability is vital to businesses looking to grow and help improve the economy.
The government is committed to maintaining up to date rate bills through regular five yearly revaluations in England which will resume after 2017, once the economy has had a chance to recover fully from the financial and fiscal crisis this government inherited from the last administration.
These measures complement the local retention of business rates being introduced through the Local Government Finance Bill which will give councils new incentives to support local firms and local shops, and also complements the new power to introduce local business rate discounts, the automation of small business rate relief and the abolition of the unfair ‘ports tax’ all enacted through the Localism Act 2011.