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Sunak’s refusal to cut business rates faces court test

FIRMS facing crippling bills for business rates are set for a court showdown this week over the Tory government’s decision to strip them of their right to appeal against their property taxes.

Independent judicial body the Valuation Tribunal will hear a series of 26 test cases on Wednesday brought by occupiers of non-domestic properties across England over changes to the business rates system.

Early in the Covid-19 pandemic, about 170,000 companies in various sectors argued that the severe disruption caused by the crisis meant that the buildings’ rateable value, on which the property tax is based, should be reduced.

They said that working from home and social distancing measures were bona fide grounds to claim a rebate, which experts estimated could be worth £3.5 billion.

Ministers initially allowed more than 55,000 firms to proceed with a formal challenge via the Valuation Office Agency, part of HM Revenue & Customs.

But in March last year, Chancellor Rishi Sunak announced that the government would retrospectively legislate to prevent any reductions, claiming that the health emergency was not an appropriate use of “material change in circumstances” tax rules.

Robert Hayton, president of the Altus Group, the firm representing ratepayers before the tribunal, said that “businesses were led down the garden path by the government’s actions, which are not only morally wrong but also wrong in law.”

Usdaw general secretary Paddy Lillis branded the current business rates system “not fit for purpose,” arguing that it advantages internet shopping over bricks-and-mortar businesses. 

The retail union leader demanded that ministers “level the playing field” by introducing an online sales tax to fund a cut in rates. 

“This will help protect shops from closure, reinvigorate our struggling town and city centres, allow retailers to innovate and, importantly, protect and create jobs,” he said. 


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