The Exchequer Secretary to the Treasury (Mr David Gauke)
The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), and I have today published the terms of reference for the Government’s review of business rates administration. This follows the Chancellor of the Exchequer’s autumn statement, where he announced a £1 billion package of business rates measures which benefits all 1.8 million ratepayers and means that around 360,000 small businesses pay no rates at all, and committed to discuss with business options for longer-term administrative reform of business rates post-2017. The terms of reference are set out below.
Terms of reference
Business rates are a tax based on property values. In England they raise around £23 billion each year, which helps fund services provided by local government. The review will consider the way in which the business rates system in England is administered by the Valuation Office Agency and local authorities, with a view to strengthening its responsiveness to changes in property values and its simplicity and transparency to business ratepayers.
The review will include consideration of the:
administration of billing and collection by local authorities, including the application of reliefs and exemptions; and of valuation by the Valuation Office Agency, including the scope for improvements in communication and the exchange of information between ratepayers and public bodies;
the circumstances under which liability can be backdated;
changes to valuation methods, consistent with the principle that business rates are based on rental property values and that the rates retention system rewards local government for growth in values; and
frequency of revaluations to enable tax assessments to be based on up-to-date property values.
In considering possible changes to the business rates system to be made post-2017, the review will balance the need for any system to deliver fairness, stability and predictability to ratepayers. Any changes will need to maintain the aggregate tax yield from which to fund local services, preserve the same level of financial autonomy to authorities and the local incentives to promote growth that were delivered through the implementation of the business rates retention scheme introduced on 1 April 2013.