The Government is being urged to do more to address business rates, after new research indicates that measures introduced in last year’s Autumn Statement are having little effect.
The analysis shows that business rate revenue is projected to outstrip both council tax and fuel duty revenues next year.
In 2013, the Government announced it would provide a relief of up to £1,000 to all occupied retail properties with a rateable value of £50,000 or less in each of the years 2014/15 and 2015/16, and rate rises were capped at 2%.
But, despite these measures, the UK has the highest property tax as a percentage of GDP (amounting to approximately 1.6% of GDP until 2018/19) of any G7 nation, OECD country and/or EU member state, said Paul Turner-Mitchell, a business rates expert who compiled the research.
He said that, based on forecasts by the Office for Budget Responsibility, the Government’s targeted action through the £1,000 retail-related discount is available to just 7.63% of cumulative rateable values of all shops, so was always bound to have a minimal effect.
The Department for Communities and Local Government estimates that the retail relief discount has been applied to 300,000 properties of the 454,000 shops with a rateable value of less than £50,000, which means that more than a third of all shops have not received the discount.
Turner-Mitchell said this is as a direct result of European State Aid rules and, furthermore, because the relief is operated at the discretion of local authorities.