CBI urges business rate revamp

15 Feb 16

The “outdated” business rates should be overhauled with uprating moved in line with the Consumers Prices Index measure of inflation and more frequent valuations, the CBI has said.

In its submission to the Treasury ahead of the 16 March Budget, the business lobby called for small business to be taken out of paying business rates altogether. Business rates are partly devolved to local authorities and set to be fully localised by 2020.

According to CBI figures, the current business rate system, as well as other government policy changes, will cost businesses around £29bn over the course of this parliament. This burden could hinder growth if it increased further, and the group said chancellor George Osborne must take steps to back UK-based firms.

Director general Carolyn Fairbairn said: “A spate of recent government policies, including the National Living Wage and the Apprenticeship Levy, will cost the economy around £9bn a year by 2020.

“The UK needs to be able to grow its way out of the deficit, but the danger of this rising policy burden is that it holds back businesses, particularly smaller firms.”

As well as changes to the business rates system, the CBI also called on the government to halt changes that will end National Insurance rebates for company pensions. These “contracting out” rebates for both public and private sector schemes are set to end in April to end as part of government moves to a single tier state pension.

A CBI survey of 46 business that employ 900,000 people found that 43% stated the loss of National Insurance Contribution relief would “significantly reduce our ability to contribute to employee pensions above the statutory minimum”.

Did you enjoy this article?