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Property industry warns against 60% business rate tax

Two leading property industry trade bodies have warned that unless Government significantly changes the business rates system, businesses could face a 60% rate of tax by 2022. 

In a joint response to Government’s review of business rates, the British Property Federation (BPF) and British Council of Shopping Centres (BCSC) have outlined how out-of-kilter the tax is with rental values, which have grown only 5% since 2000 and remain lower than their 2007 high. 

The response cites research by a number of rating surveyors which suggests that the business rates multiplier applying after the 2017 business rates revaluation will represent a tax rate of over 50%, which is likely to increase to nearly 60% by 2022. The multiplier, which determines how high the business rates bill will be, is currently set at 49.3%. 

Melanie Leech, chief executive at the BPF, said: “From the advent of the internet to the financial crash, the way we use property has seen enormous changes since business rates were introduced in the early nineties. In order to ensure that the business rates system is fair, government must ensure that the rates system takes account of these changes. Failure to do so could mean the UK missing out on investment, with longer term risks for the competitiveness of our economy.”

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