Now the Treasury Select Committee says it will take evidence on the business rates revaluation

 
Rebecca Smith
Hammond is told in Tyrie's letter than there's a need for some form of
Hammond is told in Tyrie's letter than there's a need for some form of "transitional relief" (Source: Getty)

Andrew Tyrie has written to the chancellor for clarification on the controversial business rates revaluation.

Pressure is growing for a review on an upcoming business rates revaluation after Tyrie, chairman of the Treasury Select Committee, said the Committee will take evidence on the revaluation and its effects on the economy.

Many, including London mayor Sadiq Khan, have warned changes will lead to rocketing bill rises for some businesses.

Read more: London estate agent: Sadiq Khan can easily make up for business rate hikes

Tyrie said:

The delay to business rates revaluations was bound to store up trouble. For businesses whose properties have increased disproportionately in value over the last seven years, the increases may be painful. There are two immediate concerns.

First, it would be concerning if, as a result of the revaluation, large, out-of-town premises are benefiting at the expense of small, high-street firms. I will be writing to the chancellor for the facts. Parliament needs to know the extent of this problem.

Secondly, the rise in the cap on annual increases for larger premises was both large and unexpected. The chancellor has rowed back a bit. But the cap on the relief is still high. I will ask the chancellor for the cost of restoring it to its previous level, and whether there is scope for more transitional relief.

The rates changes come into force on 1 April as a result of a revaluation of premises carried out by the government. That says three quarters of firms' rates will either decrease or stay the same.

Business rates, which are tied to the rental value of a property, have been revaluated for the first time in seven years. Taxes will surge for many businesses in London from 1 April, because rents have climbed so sharply over the intervening period.

Read more: Rates row: Government accused of misleading MPs over business rates

An excerpt of Tyrie's letter to Philip Hammond:

Dear Phil,

2017 Business Rates Revaluation

The UK is on the verge of the first business rate revaluation for seven years. I recognise the constraints on more frequent revaluations, particularly the amount of time that has, in the past, been spent on appeals. And I can understand why the government chose not to go ahead with a revaluation in 2015. But the delay of seven years, during which time, there have been significant changes in property values, means that some of the inevitable problems with any revaluation only grow. In a nutshell, the longer the interval between revaluations, the more likely the need for some form of transitional relief, with all the complexities that come with it.

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