The Government has announced a further review into the structure of the system of business rates, this follows on from a review into the administrative of the system conducted last year.
Judging by the list of questions, the Treasury is in evidence gathering mode, the wide ranging list of questions will need to be quickly whittled down with a concrete set of proposals for reform scheduled to be announced by Budget 2016.
Like most aspects of the tax system it will need to be respond and flex to accommodate some changes in the nature of businesses and the economy, however certainty in tax affairs is vital for supporting manufacturers in making long-term investments, as opposed to a system that fluctuates wildly year on year.
To that end we have previously proposed some changes we would like to see to the system to bring it up to date and will continue to make the case for these to be introduced.
Business rates (or national non-domestic rates) is the business equivalent of council tax (previously known as domestic rates). While the former has been subject to frequent changes, the latter has remained largely fixed - most notably council tax is still calculated on the basis of property values from 1991, while for businesses property values have been reviewed every 5 years.
Today's review allows a full investigation of exemptions and reliefs to be conducted - the number of which has grown since the start of the scheme with the temporary small business rates relief (in reality the definition is businesses based in the least expensive property not 'small businesses') extended at each fiscal event and a retail relief being introduced - the first sector specific relief in the history of the system.
The review will also in theory give an opportunity for sectors which are currently largely exempt, such as agricultural buildings and charities (including charity shops) to be brought into the scope of the regime unless evidence for their continuing exemption can be provided.
While there may be short term cheer, trying to come up with a system that will please all business sectors of all property sizes may prove to be a major headache for proponents of significant reform, particularly as the Treasury have also announced that the review will be fiscally neutral.
EEF will be playing our part in making sure that a regime which is stable and predictable is central to any outcomes from this review.