Business rate deferral scheme 2009-10
Published:  20 April, 2009

LONDON: The Government is going to bring forward regulations to enable businesses to defer payment of 60% of the increase in this year's rate bills until 2010-11 and 2011-12.

Once the regulations are in place - expected to be July 2009 - billing authorities will write to ratepayers offering the option to defer part of this year's increase in liability. Until then, ratepayers must continue to pay the current rate accounts that they have received for 2009-10. Any deferred amount will be added to the 2010-11 and 2011-12 rate accounts.

At present, this proposal only applies to England as the Scottish Parliament, the Northern Ireland Assembly and the Welsh Assembly are responsible for determining whether a similar deferral scheme should apply in their areas.

The reason given by the Government for introducing the new regulations is: " provide a smoother profile of business rates payments over the next three years. This scheme offers businesses the chance to pay a lower increase in 2009-10, and make up the payments in the following two years."

Robert Murdoch, head of rating at Drivers Jonas, commercial property consultancy, said: "Anything that gives some relief to business in the current economic climate is welcome, but this relief is only a brief respite and fails to recognise that businesses are facing tough choices and are cutting costs, wages and staff in order to ensure that, when we exit the current recession, they are still around to enjoy the anticipated pot of gold at the end of the rainbow.

"The Government has stated that in the next couple of years rate bills will fall because of negative inflation. I believe that the effect of the 2010 revaluation is one element not factored into these calculations.

"I would urge everyone to seek advice on how the revaluation will affect them before making a final decision on whether to defer any of this year's increase in liability."

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