Press releases

Local authorities to retain business rates

5 October 2015

James Thompson, head of business rates at Deloitte Real Estate, comments on the Chancellor’s announcement on the change in the business rates system with the abolition of the uniform business rates:

“This is a return to total local retention of rates and locally set poundages. In essence, winding the clock back to the pre “Poll Tax” system that was swept away in 1990. As always, the devil will be in the detail as the current legal framework is designed for a national tax and is unsuitable for a local one. This is particularly relevant for central rating lists and properties that cross council boundaries.

“One important check and balance that used to exist pre 1990 was the link to domestic rates paid by voters. Very few business ratepayers have a vote, so the temptation may now be for the most cash-strapped councils to increase the business rates. This could trigger a downward spiral if it drives out business and drives down values.

“There will be some very big winners and losers here unless there is some equalisation mechanism put in place. For example, the City of London and Westminster currently collect far more rates than they receive back from government. These boroughs will be able to cut their rates, whilst some councils currently that receive far more than they collect could be forced to increase rates substantially.”

End

Notes to editors

About Deloitte Real Estate
Deloitte Real Estate redefines the concept of a full-service real estate business, offering a breadth of capability and an innovative approach unequalled in the market.

Our team combines traditional property services with financial and business advisory expertise to deliver integrated solutions on the most simple assignment to the most complex. We apply a depth of insight drawn from our understanding of all industries and sectors to advise occupiers, lenders, investors and the public sector on every aspect of real estate in an increasingly complex world.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

Sue Gibson
Deloitte LLP
+44 020 7303 3156
+44 078 5539 9368
sugibson@deloitte.co.uk

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