Government Policy DENIES British Steel A £5m Tax Cut
Altus Group has discovered that the Scunthorpe steelworks should have been a big ‘winner’ under the 2017 business rates revaluation having seen it’s Rateable Value, which forms the basis of the property tax calculation, fall by almost 20% from £25.4 million to £21.31 million.
But, in order for the Government to help pay for limits on how quickly tax bills could increase for those firms facing sharp rises, strict limits were imposed on tax reductions.
Large premises which saw their property values collapse in struggling areas were restricted to tax reductions in business rates bills of just 4.1% before the effects of 2% inflation in 2017/18. During 2018/19 they were limited to just 4.6% before the effects of 3% inflation and, in the current financial year, to 5.9% before the effects of 2.4% inflation.
Analysis of official Government data by Altus Group reveals that, through the policy of ‘Transitional Relief’, which only applies to tax bills in England, British Steel’s steelworks at Scunthorpe have been ‘denied’ tax reductions of £4,608,536.15 under the policy so far since the 2017 revaluation came into effect.
Robert Hayton, Head of U.K. Business Rates at Altus Group, a long term critic of the policy, is calling on the Government to abolish the caps on tax reductions saying “The 2017 Revaluation will only gradually alleviate costs pressures on firms with large premises that saw property values plummet seeing a real term fall in business rates liabilities of no more than 13% by 2021 allowing for inflation.
“Abolishing these ridiculous restrictions on tax reductions would put fairness back into the heart of the business rates system providing badly needed respite but it is imperative to maintain the capping of large increases as they do act as an important shock absorber.”