Hammond plots business rates revolution for the Budget

 
Helen Cahill
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BRITAIN-POLITICS
The government has been speaking with businesses about reform (Source: Getty)

The chancellor is poised unveil plans to shake-up how firms pay their business rates in the Budget next week.

The business rates system came under fire in April when the government conducted its first revaluation of the property tax for seven years, creating dramatic changes in the bills faced by firms.

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After consulting with businesses, Philip Hammond has considered a range of solutions, including a possible self-assessment style system, whereby firms would submit their own valuations to the government.

However, ratings specialists and small firms have warned against a wholesale move towards self-assessment. Mike Cherry, chairman of the Federation of Small Businesses, said it would be a devastating new cost.

“Moving to a self-assessment model for business rates would mean a huge additional admin burden for small firms that could spell the end for some,” he said.

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Robert Hayton, executive vice president of ratings adviser Altus Group, said: “It is popular because it places the onus on businesses to set their own value, and woe betide anyone who gets it wrong.”

Tesco has been rumoured to be in discussions with the Department for Communities and Local Government about a self-assessment style system. Large firms, which are better able to afford property consultants, could benefit from the change.

According to rates specialists CVS, Tesco is the UK’s largest ratepayer overall, contributing around £700m, or 2.4 per cent, of the forecasted business rates bill. Tesco said it had not called for the introduction of self-assessment, and was not currently participating in a business rates review with the government.

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