At the Autumn Budget 2024, the government took action to deliver on its ambition to “create a fairer business rates system that protects the high-street, supports investment, and is fit for the 21st century”. First, it announced permanently lower business rates for retail, hospitality and leisure properties from 2026/27. Second, it published a consultation document, setting out its priority areas for reform of the business rates system.

In its response to the consultation, ICAEW’s Tax Faculty has called on the government to be more ambitious if business rates reform is to incentivise investment and growth and improve fairness within the system. We believe that the government should reconsider its plans for a corporate tax roadmap. Extending the roadmap to cover business taxes, including business rates, would allow the government to take a more holistic view of the whole range of taxes and rates that businesses pay or administer. 

In our response, we:

• support the proposal to move to yearly valuations, provided this is supported by adequate resource and more use is made of information already made available to the government;
• suggest ways to enhance improvement relief, such as an exemption for all new qualifying plant from increasing the rateable value of chargeable properties;
• propose that empty property relief should apply for a longer period (at least 9 – 12 months) and that abuse of the relief could be reduced by requiring meaningful commercial activity in the property concerned during that period;
• highlight inherent limitations in using valuations of individual properties to determine business rate liabilities and suggest that consideration is given to other methods of calculating liabilities; 
• encourage greater collaboration with the devolved administrations in Wales, Scotland and Northern Ireland so that the UK government and the devolved administrations can learn from each other in reforming business rates; and
• call for more transparency and certainty for businesses in relation to their business rates liabilities and sets out ways in which this could be achieved.

Further information

• Government policy paper: Business rates – forward look