Concern over delay to business rates review

The sector is dismayed that results of the government's business rates review will not be known until next spring's Budget

Voluntary sector figures have expressed disappointment that the outcome of the government’s review of business rates will not be known until the next year’s Budget.

George Osborne, the Chancellor of the Exchequer, told parliament in his joint spending review and autumn statement yesterday that the government would allow councils to keep the revenue from business rates by 2020.

But he said that the ongoing review of business rates, which several charity bodies expected to be complete by the end of the year at the latest, would not report back until the Budget in the spring.

Business rate relief was worth £1.5bn to charities in England in 2014/15, up £86m on the previous year, and represented 45 per cent of all business rate relief.

John Hemming, chair of the Charity Tax Group, said: "We note that the outcome of the business rates review has been delayed until next year, although we are concerned by statements confirming that business rates retention will be devolved fully to local authorities and that the uniform business rate will be abolished.

"We continue to be worried that mandatory rate relief that is so vital to charities will suffer the same fate. A clear statement confirming that charity business rates relief will not be affected by this policy would help to allay concerns in the sector that this policy announcement could threaten this invaluable relief."

Karl Wilding, director of public policy at the National Council for Voluntary Organisations, said his organisation was disappointed that the decision had been delayed until next year.

He said 100,000 charities received business rate relief so the NCVO would fight any move by the government to abolish it.

Anna Turley, the shadow minister for civil society, said the localisation of business rates was a worry for the voluntary sector. "This is something which needs to be monitored closely," she said.

"If local authorities decide to abolish the relief that is currently available to charities who occupy commercial properties, it could seriously undermine the important work these organisations do.

"If the Chancellor were to guarantee protection for charity relief, I know this would reassure the sector."

The local infrastructure body Navca said in a statement: "We are concerned that the funding changes involving keeping business rates could end up benefiting wealthy areas and penalising the poorer.

"We are also concerned that spending money raised by selling assets for revenue budget is short term and can undermine the great progress made in recent years where local people have got together to take on assets for the community."

Osborne told parliament yesterday that the government would give councils the power to cut rates and allow elected mayors to raise rates them, provided  increases are used to fund "specific infrastructure projects supported by the local business community".

He said that the move to allow councils to keep business rate revenue would be accompanied by a phasing-out of the grant they receive from central government.

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