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Business Rates: From bricks and mortar to a tax for the digital age

Nearly six months after the introduction of a new business rates regime Mark Radford reviews progress to date.

Back in the heady days of Spring 2014 in recognition of the damage caused to the economy by high rate bills, the Chancellor of the Exchequer George Osborne famously described the business rate system as ‘not fit for purpose’.

Retailers across the country had hoped that Government would finally address the disproportionate burden of rates on the high street and the uncompetitive advantage of rate free internet sales.

However, the need for a fundamental review of the business rate system was secondary to the urgent need to reset rateable values to align them more closely with current economic conditions.

In April 2017 all non domestic property was re-valued and the new rateable values which have been introduced are intended to reflect the recent property market .

As a result of time constrains, the revaluation adopted the traditional method of assessment for shops. This means many high street retailers are still paying higher rates per square foot than nearby supermarkets or out of town stores.

Additionally, the lack of any real change to the valuation process has meant that the bills of many independent retailers remain artificially inflated. The current system is still unable to reflect some of the pressures on the independent sector, particularly the deterioration of trading conditions which often follow the arrival of fast food outlets and charity shops.

In tandem with the revaluation the Government has introduced a new appeal regime called ‘Check, Challenge, Appeal’.

This was recommended as a great step forward and an exercise in modernisation and transparency.

Sadly, it has proved a great disappointment.

Ratepayers and their advisers are currently finding the process is unnecessarily complicated, very time consuming and invasive –and that’s when the government software is working properly.

We can only hope that the system will improve with time.

But it is not all bad news.

Raising the rateable value threshold for 100% small businesses relief from £6,000 to £12,000 has taken an extra 600,000 businesses out of rates altogether. This is to be welcomed, but the proposal contained in bira’s  Business Rate Manifesto to replace the £12,000 threshold with a £12,000 allowance would go even further  to redress the unfair burden of rates on high street retailers.

Finally, in the Spring Budget the Chancellor announced a new £300m discretionary rate relief scheme .

The idea of the scheme is to allow councils to introduce local funding arrangements to help businesses most affected by rate changes.

These discretionary systems often operate on a first come, first served basis, so it might be worth a quick look at your local council’s web site to check out any qualifying criteria.

bira members will also be interested to know that in many parts of England, local councils have not received many requests for relief and they are currently sitting on large amounts of cash waiting to be given away to qualifying businesses!


Mark Radford operates the bira business rate service and can be contacted on 07399 471972 or at