Calls for 'fairer' rates calculation

17th June 2020

A consultation on the reform of business rates has heard calls for a 'fairer' calculation of rates.

The group, representing councils and businesses across the country, found that business rates increases could be linked to the price of goods as this would give a more accurate reflection of the conditions faced by businesses. However, it also cautioned that a 'cash flow gap' could arise from attaching increases to the Consumer Price Index (CPI). This follows a study by the Confederation of British Industry that found that such a change could result in an annual saving for businesses of around £1.5bn. This concern was touched on by Rob Whiteman, chief executive of CIPFA, who stated that any reform leading to a reflection of CPI must ensure that local authority funding remains "fiscally neutral".

In a joint consultation response the group stated that, on balance, rates should remain linked to property values, as any switch to a system that is fair for businesses and simple to collect would be difficult to devise.

 

 

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