Chancellor Rishi Sunak has ignored calls from industry chiefs to shake up the business rate regime at the next budget.
According to The Telegraph, government plans to overhaul the business rate system have been “thrown into the long grass”.
The Chancellor has not had enough time to consider the effects of wholesale changes to the regime, government sources said. Minor tweaks are expected to be announced later this month.
The Treasury delayed the publication of a review into business rates at the last budget in March. It is expected to be unveiled at the upcoming budget on October 27.
The news comes after a group of industry chiefs pressed Sunak to launch a shake-up of the regime to unlock billions of pounds of investment to accelerate the drive toward net zero and help the government achieve its levelling up agenda.
The Confederation of British Industry (CBI), alongside 41 other trade associations representing around 9m workers, said the “outdated” system disincentivises businesses from expanding due to up to 50 per cent of investment possibly being caught by the tax.
Business rates are charged on non-residential properties, based on estimates of the premises’s valuation. They have been a source of scorn for businesses across the UK due to the system making them less competitive compared to online firms, who do not pay the tax.