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Birmingham Post
Birmingham Post
Business
Graeme Whitfield

Business groups hit out after Treasury delays review of business rates again

Business groups have hit out after the Treasury has confirmed it is delaying the final report on its review of business rates until later this year.

Ministers say they will now publish the findings from the department's fundamental review into the property tax until the autumn, when it expects there to be more economic certainty.

The major review of the business rates system was called by the Chancellor at last year's Budget, with a call for evidence launched in July.

Responses from the call are now "being considered" by the Government, with plans for an interim report to be released on March 23.

Retail, hospitality and leisure operators are currently benefiting from a business rates holiday for the current financial year, which will end on March 31.

Sector bosses have called for the £11bn tax break to be extended for another year after the industry was battered by enforced closures due to the pandemic.

Kate Nicholls, chief executive of trade group UKHospitality, said: "The business rates system as it relates to hospitality has been broken for some time.

"It is an antiquated system of tax that bears almost no relation to the realities of business in the 21st Century. It needs addressing, so a delay in the review is obviously a disappointment.

"If it must be delayed, then it is absolutely vital that the Government uses the extra time to ensure it gets this right."

Non-essential retail stores are currently shut due to the nationwide lockdown and are hoping to gain clarity over when they can reopen when the Prime Minister confirms the "road map to recovery" on Monday.

Retail bosses have also called on the Chancellor for a major overhaul of the rates system in order to put store-based business on "a level-playing field" with online retailers, who have seen strong sales growth during the pandemic and pay significantly lower rates.

On Thursday evening, Next boss Lord Simon Wolfson said rates for retailers on the high street should be cut by 35% with the commercial property tax increased for online rival warehouses instead.

Suren Thiru, head of economics at the British Chambers of Commerce, said: “Delivering fundamental change to this longstanding drag anchor on business has become only more pressing in light of Covid-19.

“Delay in reforming a broken system will hamper any recovery by exacerbating business cash flow concerns as part of the fixed cost base that firms can do little to push downward.

“The delay in the review underscores the need to urgently extend business rates relief for retail, hospitality and leisure and provide rates relief to all firms whose ability to generate revenues are severely impaired by the pandemic.”

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