// Conservative plans to reduce business rates by just £10 million each year after 2021
// Altus Group says the reductions do not go far enough to bring change for the high street
// Rates will “need to go much further and deeper to have a meaningful impact” according to experts
The reality of the Conservatives’ proposed cuts to business rates have been revealed, with experts stating retailers will see a mere 0.03 per cent reduction in rates from 2021.
Under Conservative spending plans the aim to reduce business rates by £10 million a year from 2021 to 2023 do not go far enough to have a “meaningful impact”.
READ MORE: Outstanding business rates challenges jump by 35%
The issues is one the government has been promising to tackle for a while after coming under pressure from retail lobbying from the British Retail Consortium.
Earlier this month data from the HMRC showed the number of businesses waiting for challenges over soaring business rates to be resolved has jumped by more than a third in just three months.
According to the HMRC the number of outstanding challenges has risen by 35 per cent, fuelling concerns from experts over the rates appeal system.
The increase in unresolved business rates challenges has been revealed as the BRC warned that retailers were being short-changed by more than a billion pounds due to failings in the rates appeal system.
BRC chief executive Helen Dickinson said businesses could be owed £1.4 billion over the five years to 2022 through the appeals system.
Speaking before the annual CBI conference last month, Prime Minister Boris Johnson promised to “reduce the overall burden” of business rates as well as launch a review into the rates system.
Retailers have criticised the current business rates system for exacerbating the decline on the high street by placing high cost pressures on shops, pubs and cinemas.
The Conservative manifesto outlines plans to reduce the rates burden by £320 million in the 2020-21 financial year, by extending a retail discount from 33 per cent to 50 per cent for businesses with a rateable value below £51,000.
However, Altus Group pointed out that for the three following years, it said it will only reduce total tax receipts by £10 million each year.
This compares to a business rates yield of more than £33 billion for each year from 2021-22, meaning the rates cut will only reduce the burden by 0.03 per cent.
“The commitment to lower the burden as part of a wider review is an acknowledgement that the standard rate of tax, at its highest level since 1990, at over 50 per cent, is a major issue for business across all sectors of the economy,” said Altus head of business rates Robert Hayton.
“However, the promised cut of around 0.03 per cent from April 2021 whilst a start, will need to go much further and deeper to have a meaningful impact,” added Hayton.
Altus Group added that the manifesto does not clarify how the £10 million reduction will be implemented or spread across rateable businesses.
With PA Wires
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