The group said this fuels claims that the system is criminalising firms that are struggling to cope with the “ever increasing” tax burden. Business rates rose by an extra £847m (3.5%) from April this year to £24.8bn.
Altus found out from a Freedom of Information request that, of the 1,246,178 business premises with business rates demands, 15.16% of them received a summons to appear before a Magistrate last year.
“Annual inflationary rises for the seven years prior to the revaluation pushed the tax rate from 41.4p in 2010/11 to 49.7p in 2016/17, meaning a rise of 20% in bills even before the revaluation came into effect creating financial pressures,” Robert Hayton, head of UK business rates said.
“Add to the mix the current, deeply unfair, system of downward transitional relief which severely limits the amount by which bills can go down, [and this] meant many businesses ended up paying disproportionately high bills in locations where local economies were underperforming and values had fallen,” he added.
ICAEW said on Tuesday that business property is seen as an “easy tax target” and an “increasingly easy source of government revenue”.
John Boulton, ICAEW manager of technical strategy, said, “British businesses face the highest property taxes in the OECD, resulting in the last 10 years showing receipts rise from £21bn to £29bn.”
He believes that no consideration is currently being given to profitability when calculating business rates. “A drop in sales is not directly reflected in a company’s rates, leaving it vulnerable to failure in a downturn,” he said.
ICAEW suggested the government should either maintain business rates but with changes; demolish them altogether, raising lost tax revenues via alternative methods such as increased corporation tax; rebuild a new property tax with simplified assessments; or refurbish the tax and reform particularly problematic elements.