Supplementary memorandum by the British
Retail Consortium and the CBI (LGB 39(a))
Because of the necessarily reduced time we had
to discuss the issues raised in the draft Bill, we thought it
might be useful if we set out our views on an issue which we were
unfortunately unable to cover: Business Rate claw-back on appeals.
While this may appear to be a largely technical issue, it actually
has fundamental significance for businesses and would have a major
impact on their ability to plan for the future with confidence.
The business community believes that the Government
should make every effort to estimate losses on appeals accurately
and that there should be no scope for clawing back the money later.
We advocate this for two separate reasons: First, it gives the
Government an incentive to make the estimates for losses on appeal
as accurate as possible. Secondly, it continues to guarantee that
extremely valuable stability on Business Rate bills between revaluations.
The prime attraction of the current RPI-capped
UBR is that it allows businesses to plan for the future with confidence.
Allowing the Government to claw-back losses on appeal would effectively
remove the RPI-cap and completely undermine this essential attribute
of the UBR.
Denying the Government this power would give
them a powerful incentive to improve the accuracy of their estimates.
The rate poundage is not adjusted for other changes in the yield,
for example for extra revenue from new properties coming on stream.
We therefore strongly recommend that claw-back
powers should not be included. However, if the Government decides
to the contrary, the least damaging way of introducing a claw-back
facility should take account of other factors and take effect
at the following revaluation when the NNDR rate poundage needs
to be re-set in any case. In this way, the Government would not
lose any revenue, but businesses would be offered the stability
they need.
We hope that these views can be taken into account
by the Committee, so that this area of considerable concern to
business can be addressed more appropriately in legislation.
Michael Roberts
Business Environment Director—CBI
Andrew Smith
Executive—Property and Regeneration—BRC
12 July 2002
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