GL Hearn/Property Week business rates forum

Industry forum examines “broken” UK business rates system

All three main political parties recognise that the business rates system isn’t working. In their manifestos, the Conservatives and Labour have both promised to review the system while the Liberal Democrats have gone a step further, pledging to scrap the tax altogether in favour of a commercial landowner levy.

Ahead of this month’s general election, GL Hearn brought together a panel of experts to explore what the key problems are with business rates, focusing not just on the retail sector but also on manufacturing. The panel also looked at what short-term and long-term reforms should be made to business rates, and how best to convince the next government to implement them..
Panel of experts

Dominic Curran, property policy adviser, BRC (British Retail ConsortiumGary Hoskins, director of tax – intu

Rachel Kelly, senior policy officer – BPF (British Property Federation)

Richard New, partner – Mills & Reeve

Jaspal Singh, real estate manager – Vauxhall Motors

Richard Williamson, national head of rating – GL Hearn

Bruce Wilson, director, national head of corporate advisory – GL Hearn

Edward Woodall, head of policy & public affairs – Association of Convenience Stores

Guy Montague Jones, deputy editor – Property Week (chair)

What are the biggest problems with business rates?

Dominic Curran: This requirement for a fixed income is at the heart of the problem. It feels like there is a final sum that the Treasury wants to get to every year and the whole system is reverse engineered to get there. There’s no other tax in the UK like that. Anything that you give to one group has to be paid for by another group.

Richard Williamson: “the tax is higher here than in any other developed country”

Richard Williamson: The Treasury Select Committee got it in one. The system is broken. It is an increasing burden on business and there is this complicated web of reliefs that very few people understand. They’re sticking plasters. Fundamentally the tax is too high and simply needs to reduce. You can show that with reference to the entire developed world – the tax is higher here than in any other developed country.

Jaspal Singh: From a corporate perspective, it disincentivises manufacturers to invest in the UK because, for example, Vauxhall will be getting taxed on plant and machinery. When we are being benchmarked against our sister manufacturing plants in Europe, it puts the UK at a disadvantage. Vauxhall pays 60% of Opel’s total property tax bill but the UK accounts for only 8% of Opel Group’s footprint.

Dominic Curran: “there is no other tax in the UK like it [business rates]”

DC: The Treasury Select Committee also mentioned it is making the UK uncompetitive. In the context of manufacturing, when you have that punitive level of tax, why would you choose to base your business in the UK as opposed to another more benign regime?

Edward Woodall: All we’ve done for the last 10 years is recut the pie. Fundamentally, it’s an outdated system. If it were a social media platform, it would be MySpace. It’s not fast, doesn’t have good content and doesn’t have good process… Click link below to read full article.

Photo by Paul Burroughs

Source: Property Week

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