The government’s ongoing business rate review must aim to create a ‘simple, fair and competitive system’, the Confederation of British Industry (CBI) has said.
The business organisation argued that the current system limits investment and impedes competition. It said a new system should be refocused onto promoting investment-led growth.
The CBI is calling for:
- More frequent property valuations
This will create a fairer system capable of reacting quickly to the changing economic environment. The CBI suggests introducing a 3-year evaluation period.
- Raising rates in line with the consumer price index (CPI) instead of the retail price index
This will ensure that business rates do not rise faster than the official CPI inflation rate. According to the CBI, the change would save ratepayers £1.5bn.
- Exempting properties with a rateable value under £12,000 from paying business rates
This will remove the cost of business rates for many small businesses. The CBI also argues that this would also enable efficiency savings which could be reinvested into improving the system.
Katja Hall, deputy director general of the CBI, said:
“The current business rates system harms businesses by relying on a decades-old model that no longer reflects economic conditions. That’s made life tough for retailers in particular.
“These reforms are long overdue so it’s good that the government is following through on its commitment to look closely at how it can help alleviate the most onerous aspects of business rates.”