The current business rates system has again shown why further reform is needed sooner rather than later.
£2 billion set aside to cover appeals against business rates remains unspent. The Valuation Office Agency (VOA) has reserved 3.6% of the total rates bill to cover any successful appeals against business rates; but only 1.4% of the reserve pot has been awarded to claimants since 2010, leaving £2 billion unaccounted for, even though rules stress that the VOA cannot have a surplus.
While annual business rate rises are capped at 2%, rateable values and the business rates system as a whole will not be reviewed until 2017.
In a government consultation this summer, Bradford Chamber called for more clarity and transparency to enhance businesses’ understanding of the process. Individual bills for all commercial premises is preferred to bandings (like Council Tax) or geographical zones with an accumulated average (two of the consultation paper suggestions). More frequent (or consistent) evaluations were also called for in the Chamber response.