A fundamental review of business rates is needed so that the system reflects today’s economic realities

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With significant brick-and-mortar assets, hospitality and tourism businesses have suffered disproportionately from recent significant business rate rises. As a labour-intensive, people-focused industry we are also facing cost pressures from the introduction of the National Living Wage and face high rates of Tourism VAT. These issues contribute to a perfect storm of challenges particular to the hospitality and tourism industry.

In Spring 2017, the BHA joined a coalition with 10 other organisations including the FSB and the CBI, representing  over 100,000 businesses. This coalition wrote to all MPs expressing concern about the impact that changes to business rates will have on all our members. The letter highlighted the issues that thousands of businesses are facing as a result of the revaluation, with many due to receive significant increases in their rates bills.

Further efforts by the BHA and members of the coalition included a national media campaign, which in March led to the Chancellor announcing, at the Spring 2017 Budget, a short-term £300 million fund for local authorities to provide discretionary relief to help small businesses with business rates. The measures were called a ‘drop in the ocean’ by the BHA, particularly as 250,000 businesses continue to await the outcome of appeals from 2010.

We are now applying pressure on Government to enact the promised £300m rates relief to Local Authorities, and also request that they prioritise hospitality and tourism businesses facing severe circumstances.

The business rates appeals process must be fair and transparent and the BHA was proud to secure a commitment from Government that it would not restrict reductions in 2017 rating assessments to cases where the valuation was ‘outside the bounds of reasonable professional judgement'.

The new business rates appeal process in England, known as Check, Challenge, Appeal (CCA), went live from 1 April 2017. The new system has caused significant delays, failing businesses with its unduly onerous and burdensome appeal rules. We issued the Valuation Office Agency with Freedom Of Information (FOI) requests to understand how many delays are facing hospitality businesses so we can put pressure on authorities to speed up favourable resolutions. The results from the FOI highlighted that, after seven years since the start of the 2010 Rating List the authorities have yet to deal with appeals on over 15,000 properties in the sector. The Valuation Office Agency has stated that it is committed to settling all 2010 Rating List appeals by 31st March 2019 so businesses may have nearly 2 more years for their retrospective appeals to be concluded.

Further work needs to be undertaken in ensuring the appeals process is fit for purpose and able to respond to business demand. We are leading the campaign in highlighting the issues of CCA and calling on Government to reform the system. We have secured meetings with MPs of all parties to call for their support on CCA issues as well as their support for long term reform of the business rates system.

We welcomed that during the 2017 Budget, the Chancellor recognised the unfairness of rates on bricks and mortar businesses and promised to review it.

The BHA is calling on Government to undertake a fundamental review of business rates so that the system better reflects today’s economic realities and the emergence of a huge digital economy with little or no physical presence which could attract rates.

Scotland

The BHA has engaged with the Barclay review of Business Rates and secured a one year 12.5% cap on rises resulting from the 2017 revaluation for 8400 businesses in the hospitality sector from the Scottish Government.

For details of the announcement made by Finance Minister Derek Mackay in February 2017 in response to BHA lobbying, please click here - http://www.bha.org.uk/bha_news/business-rates-update-scotland/

Wales

BHA Wales Executive Director David Chapman took personal case studies and the results of a member survey to two National Assembly for Wales Cross Party Groups and two Westminster All Party Groups of Welsh MPs to highlight the erratic, inconsistent and punitive increases that appeared to be randomly inflicted on pockets of members, some in key employment locations.

A BHA Cymru delegation including Chair Justin Baird Murray, Vice Chair Anthony Rosser and Llandudno Hospitality Association Chair Berin Jones met Welsh Government Cabinet Secretary for Economy and Infrastructure, Ken Skates, and he responded very positively by offering a meeting with Finance Secretary Mark Drakeford to discuss those suffering hardship and enable a hearing for the argument of reform of the system which was only devolved to Wales in April 2015.

Exclusive offer to BHA members – free expert consultation on Business Rates

Do you need professional advice to help reduce your Business Rates liability?

The BHA has partnered with Altus Group to provide services to help members reduce their business rates liability and update them on relevant changes to the Business Rates system. Over the last 60 years, Altus Group has built up one of the most highly regarded and trusted professional property advisory services in the UK. They represent over 16,000 clients and understand the intricacies of the hospitality sector representing both hospitality SME’s through to larger organisations.

Altus can help BHA members with guidance on all issues related to Business Rates, whether in deciding to appeal or taking advantage of options such as paying rates to their local authority in 12 monthly, rather than 10 monthly instalments. To arrange your free consultation with Altus Group please email businessrates@bha.org.uk.

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