Our Thoughts
Fri, 07/06/2024 - 12:00
· 2 min read

General Election 2024 – Business Rates

Plus ça change, plus c’est la meme chose? The main parties are yet to publish their election manifestos, but are they likely to include any changes to business rates?

Before the 2017 election Labour’s position was to replace business rates with a Land Value Tax.  At their Autumn 2021 conference they pledged to get rid of business rates, but since then have made no further announcements about what they would replace them with.  Should Labour come to power as expected, will they be able to afford reforming a reliable and resilient tax base with a 99% collection rate?  With the Valuation Office Agency well advanced in its preparations of the 2026 rating list, we fully expect the status-quo to be kept for the foreseeable future.

It’s unlikely that the Conservatives will make any changes to their existing plans of “digitalising business rates”.  A feature of this policy was understood to mean placing business rates bills on a portal where they can be paid in the same way as other HMRC taxes, but this particular aspiration appears to have faded, possibly because business rates are fundamentally a tax collected by local councils.  Instead, Government’s ongoing development with the Check Challenge Appeal system on Gov.uk is progressing towards a Duty to Notify - a requirement to complete annual property returns, or in the event of any significant changes, an interim return. The enabling legislation received royal assent last October, although the design of the system to implement this is still in its infancy and is unlikely to be ready in time for the 2026 revaluation.

It is interesting to note that The Liberal Democrats still favour a Land Value Tax to replace business rates, although a 2019 parliamentary inquiry concluded such an option would be difficult to implement.

In view of the strain on public finances whoever wins the election will have limited room for manoeuvre. It is therefore expected that the current direction of travel towards self-declaration will continue, and any reform is more likely to consist of “tinkering around the edges” rather than fundamental change.

 

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General Election 2024 – Business Rates