Memorandum submitted by the Royal Institution of Chartered Surveyors (BRS 02)

 

1. The Royal Institution of Chartered Surveyors (RICS) represents the views and interests of 140,000 Chartered Surveyors worldwide covering all aspects of land, property and construction. RICS is regulated by its Royal Charter with the objective of promoting the public good. This allows RICS to comment independently on matters that it perceives to be relevant to its profession.

 

2. We welcome the opportunity to present evidence to the Business Rates Supplements Bill Committee. This paper sets out a short summary of RICS' views on the Bill.

 

Summary of RICS' views:

 

3. We do not support the introduction of a business rates supplement as we believe it damages the predictability and stability of the existing system of local business rates, which is a major strength of the system

 

4. The existing Uniform Business Rate (UBR) is set at a high level, both in comparison to other UK

tax rates and in comparison to local property taxes in other European countries.

 

5. There is therefore little sound economic reason for introducing supplements, and little enthusiasm from the business community for such supplements.

 

6. Instead, an element of existing UBR should be set within the control of local authorities with local authorities free to retain a yield up to that amount or to collect less than the full local element.

 

7. If, however, a supplement on existing UBR is to be introduced it should be subject to a vote by the businesses that would be called upon to pay it and require a "dual-key" majority for its implementation.

 

8. Given that a detailed system of Small Business Rates Relief exists, it is difficult to understand the rational for excluding hereditaments with rental value below £50,000.

 

9. The business rates system is already over-complex. It will be important to ensure that any supplement is simple to calculate and levy and that it adds as little as possible to the complexity of the system. The interaction with existing reliefs and supplements will also require careful consideration.

 

10. Many of the benefits of projects funded by business rates supplements will accrue to property owners rather than to property occupiers (ratepayers). Some effort should therefore be given to finding means to levy supplements on owners either as well as or instead of occupiers.

 

January 2009