Now Minister faces grilling by MPs on rates shambles
COMMUNITIES Minister Sajid Javid faces a grilling next month over the Government’s handling of business rate rises, as MPs prepare to launch an inquiry into the fiasco.
Ministers had to scrap plans that would have stopped firms complaining about incorrect bills. Now the Communities and Local Government Committee will scrutinise the rates system and the pressure it is putting on town centres.
Critics say high street shops are taxed more harshly than online retailers and out-of-town superstores.
Committee chairman Clive Betts said: ‘There is a fundamental problem in the way valuations for business rates are done and that needs to be looked at.
‘High street shops seem to pay more than a similar unit out-oftown. That doesn’t feel right when there is a public and political view that high streets need some form of protection. There’s also an imbalance between property-based businesses and online sellers.’ He said a public meeting with Javid to discuss the housing White Paper would raise these concerns, given the Chancellor referred to finding ‘a better way of taxing the digital part of the economy’ in the Budget.
Betts said the committee would use an existing investigation into business rates as a launchpad for its inquiry. He added: ‘I think 2020 seems a good point to aim for, not the next valuation.’
From 2020 councils will be able to retain 100 per cent of business rates. But the timing of the inquiry could wrong-foot Javid’s Communities Department, which told The Mail on Sunday last week that the review hinted at by the Chancellor – which would be overseen by Javid – would be ‘part of the next review’ ahead of the 2022 revaluation.
Betts said: ‘More and more MPs are raising their voices, saying, “I can see this happening in my high street”. This is a cross-party issue.’
The Government has long promised to overhaul business rates, but this is the first time they have been investigated by a parliamentary committee.
The system is completely different for Scottish businesses. The postponed review of rates that was to be carried out in 2015 will now come into force on April 1.
The new rateable values will benefit many business who will see bills cut. But some businesses north of the Border are voicing concerns about the large rises which they fear could adversely affect their business.
The threshold for paying the rates has been substantially raised, from £10,000 to £15,000. The Scottish Government has also lowered the rate poundage by 3.7 per cent, so businesses pay a lower percentage of their rateable value. The rate is now 46.6p, with some larger businesses paying a supplement.