What does the Chancellor’s Budget mean for the estates industry?
29th March 2017
Categories: Latest News
As a property professional the Chancellor's budget is always of interest to me. Whether there are changes in Stamp Duty Land Tax thresholds, business rates amendments or announcements to facilitate the housing industry, I always listen out for changes that may affect me personally or my profession generally. I am pleased to say the budget on the 8th March didn’t let me down. This budget presented an opportunity for the government to counter the thoughts of many of my peers that the real estate industry is low down the priority list. Unfortunately, in my opinion it failed to change that view point. Certainly if I thought any real changes to business rates were going to be announced I was left disappointed. Although the mass of protests to the rates revaluation at the start of April did not completely fall on deaf ears. Chancellor Hammond did offer some £435m of cuts to business rates centred around 3 areas. A £300m fund for discretionary rates relief, discounts applied to public houses with a rateable value of less than £100,000 and a cap of £50 a month for businesses coming out of business rates relief. It goes without saying these measures are certainly welcome but clearly there is no real help for businesses facing large increases in business rates.
So what measures did the Chancellor decide not to pursue further, particularly on the issue of business rates? Talking to my peers in a recent property conference it was agreed there were several key omissions. These included, crucially, no tapering of increases in business rates and also a failure to remove the cap which prevents businesses from benefiting from any decrease in business rates.
A point of particular debate was the Government's rejection to remove certain specific wording which would be used when assessing appeals. As drafted it would now appear that businesses will be forced to pay any assessment deemed to be "reasonable" by the Valuation Tribunal, even if the rateable value could be proved to be lower on appeal. The Chancellor did promise to introduce a 'smoother' business rates system and hinted at the likelihood of more frequent revaluations and the possibility of a form of self assessment. On the face of it, these changes would help deliver a more responsive business rates system and reduction of the high level of appeals currently under consideration. Of course, the devil is in the detail and we shall wait and see how this is rolled out in due course.
Well, I shall look forward to the next budget in the Autumn, assuming of course there is no dramatic u-turn on business rates in the interim on a similar scale to the change announced on national insurance contributions!
Paul Palmer is the TDA Estates Manager and can be contacted at firstname.lastname@example.org