Welcome to our blog on non-domestic rates localisation. If you are the occupier of commercial property in the UK, your business is almost certain to be paying the business rates levy. And whether your business is small, large, single site, multi-site, office, retail unit or factory-based, you will find this blog of interest.
During the coming weeks and months, the government will finally get to grips with the whole question of rates localisation, ie the possible transference of at least some responsibility for the setting of your rates bill from central government to your local authority.
What does this mean for you, and why should you care? Well, I have re-printed below an article I published in our rating newsletter, Rating in Brief, in July 2007. Looking back now, the article was strangely prophetic.
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After 3 years of research, analysis, review, revision, postponement and delay, the Lyons Report into Local Government was finally published in March[2007]. Earth-shattering it is not, appearing to confirm all of our suspicions: with an incoming Prime Minister[Gordon Brown] cuddling up to big business and also keen not to upset the electorate, very few of the options for the reform of Local Government finance, as described by Lyons, appear palatable to the ruling party at this time.
As the report essentially focuses on grasping the nettle of a long-delayed residential property revaluation, the question of local versus centrally levied business rates has been sidelined….for the time being. A success of sorts for the many business leaders, industry associations and correspondents, including contributors to Rating in Brief, who have lobbied tirelessly for the non-domestic rating status quo.
However, for all the delays and the years of lingering uncertainty which the Lyons Report brought about, Sir Michael may have successfully uncorked the ‘place-shaping’ bottle. I fear the genie of business rates localisation will surface again at some point in the future. I, for one, will be waiting and watching.
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True to our word, we have been waiting and watching, and I now get the feeling that our new Prime Minister’s focus on the Big Society is about to breathe new life into Sir Michael Lyons’ place-shaping agenda.
The question for all of us is, how far does the government intend to move towards locally variable business rates, who will win, and who will lose out? Most important of all, does localisation spell the end of the road for the three key tenets of centralised rates administration: fairness, equality and predictability.
2 comments:
Interesting blog. So if local authorities get more involved in the process will businesses paying rent see their rates bills go up?
Hello, and thank you for reading the blog. We intend adding much more content to explain what has happened so far, and what might happen in the future wrt localisation.
To answer your question, localisation does not necessarily mean that your rates bill will increase. There are a lot of factors involved. What it could mean is that your local authority gets more involved in determining your rates bill. This raises the question of ‘equalisation’.
In our Rating in Brief newsletter of June this year, we wrote the following, which sums up one of the many issues which this blog will discuss:
“...…..Having promoted a vision of local authorities empowered to raise local taxes through non-domestic rating, it appears that the Conservative Party may, at last, be listening to the voice of business.
Not surprisingly, the question that has prompted a re-think is that of equalisation: how to explain why two identical businesses, located on opposite sides of the same road, but under the control of neighbouring local authorities, should be paying different levels of business rates...……..”
The current process has been designed to be fair, equitable and predictable. These are characteristics which businesses value. A more localised approach could add variability and, for some businesses, uncertainty.
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