The British Retail Consortium (BRC) has welcomed the extension of the business rates review announced in Chancellor George Osborne’s Autumn Statement today.
A major overhaul of the business rates system was announced earlier this year, with uniform rates set to be abolished. Local councils will, by 2020, be able to set their own level of rates, giving local authorities the power to compete with one another for business.
Earlier this year Osborne called the overhaul a “devolution revolution” and said it is the “biggest transfer of power to our local government in living memory”. Some £26bn raised in business rates each year will be left within the control of local councils to spend as they see fit.
However, speaking to the House of Commons earlier today, Osborne confirmed the plans but said that year-long review of the outdated business rates system will be extended, with the report now expected at the March 2016 Budget
Helen Dickinson, BRC director general, said: “It is encouraging that the government appears to be taking [its] time to consider their options for fundamental review of the business rates system.
“We have long said that it would be better to take the time to get the solutions right on the first go and design a system that is fit for purpose. How rates reform will fit into the wider Business Tax Roadmap will be a big question in 2016.”
She said that the Chancellor needs to reduce the “disproportionate burden” of business rates on the industry and keep going with its review because it is the “key” to delivering the core of the government’s reform programme.
She added: “While we eagerly await the detail behind the plans to devolve rates to local authorities over the next few years it is clear that devolution does not address the key problems of the rates system.”
Osborne said that that he would extend the Small Business Rate Relief scheme for another year to help small businesses with the cost of rates.
Meanwhile, the Chancellor also confirmed an apprenticeship levy, which will be set at 0.5% of payroll and apply to firms employing over 150 employees. It is hoped the levy will raise £3bn a year and fund three million apprenticeships by 2020.
On the subject of apprenticeships, Dickinson said: “The government is absolutely right to want to increase the number of apprenticeships but in doing so it must make sure the quality is increased too.
“We welcome the decision to establish a new employer-led body to set the standards and ensure quality.”