The controversial business rates reforms could have taken an unexpected turn, with the government reportedly exploring a self-assessment option similar to that of income tax.
Global real estate agency Colliers has revealed that the country’s key accountancy firms, including Deloitte, KMPG and PwC, have all been approached by the government to advise on how a self-assessment method could work.
There has been increasing pressure to ramp up the rate of revaluation on business rates, which currently happens once every five years and affects the retail sector.
This scheme would remove the overwhelming burden currently placed on the Valuation Agency Office (VAO), which is struggling to deal with a torrent of appeals.
“The official line is that the government is looking at all the options,” head of rating at Colliers International John Webber said.
“However, my sources have confirmed that the ‘big four’ have been consulted on how to make self-assessment work and what lessons could be learned from personal taxation,”
“I now understand the government favours self-assessment not only as a way of delivering more frequent revaluations, but also as a quick-fire method of cutting costs at the VOA which is itself sitting on a backlog of over 300,000 business rates appeals.”
Business rates are based on the value of commercial property as well as the annual rate of inflation.
The new rates which are expected to come into effect in April this year have caused widespread concern, especially among retailers.
It is estimated it could cost retailers around £2.3 billion and throw many small businesses into financial turmoil amid the uncertain conditions in the year ahead.