Warning on business rate quick fix

13th December 2013

The Institute for Fiscal Studies (IFS) has said that Government measures to ease business rates would "create instability" for firms if they are not matched by fundamental reforms.

The IFS warned that although the temporary measures introduced in the Autumn Statement, including a move to cap business rate rises next year at 2% instead of the higher retail prices index, were welcome, using quick-fix policies risked making firms dependent on a form of subsidy.  Paul Johnson, director of the IFS, commented: "Forever extending temporary reliefs has two effects. First, it increases uncertainty for business. Will the relief exist next year? What will my tax bill be next year? Second, the more businesses get used to the relief, the harder it becomes to undo it. An unavowedly temporary measure becomes a permanent one."

Source: The Daily Telegraph   07/12/2013