Call for overhaul of rates system

Recent estimates from the Office of Budget Responsibility (OBR) suggested the amount collected in business rates would outstrip council tax and fuel duty combined by 2015-16.

It will generate £32.3bn by 2018, up 41 per cent from 2008, the OBR said.

A group of 15 companies, including General Motors, Tata Steel, Siemens and BASF, recently called on the Chancellor to overhaul business rates or risk making the UK unattractive to investors.

The British Property Federation has urged the government to move to annual revaluations for businesses.

The British Chambers of Commerce has produced a document for the next government, A Business Plan for Britain, which calls for a revaluation of premises in 2017 and complete reform by 2022.

The policy is backed by Dorset Chamber of Commerce and Industry.

Marcus Andrews, of Goadsby, said: “The current business rate system dates back to the 1990s. It needs be changed and made to work for the realities of running a business today and beyond.

“A major problem is that the revaluation that was due to take effect next April, which would have seen lower bills, reflecting locally the lower rents now paid on shops factories and offices, was deferred till 2017.”

He suggested a return to the old system where only half rates were charged while units were empty.

He said the system penalised property owners as well as traders who had been forced to close but could not dispose of their unit.

“While these businesses paid up, larger ratepayers made use of legitimate avoidance schemes.”

Owners of empty properties often resorted to slashing the rent to attract a new tenant, who would be faced with a high rate bill.

Mr Andrews said: “Things need to be put right permanently, not tinkered with as the current and previous governments have done with a series of short-term measures which have really been designed to stifle calls for fundamental long term change.”