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Government to continue prescribing decapitalisation rates for 2017

Decapitalisation rates will continue to be prescribed by the government for the 2017 business rates revaluation, following a DCLG consultation.

Of the 31 councils, ratepayers’ organisations, rating agents and professional bodies who responded to the consultation, 29 said the government should continue to prescribe the rates.

They said that if rates were devolved to local government at this stage, there was a risk of confusion, litigation and funding shortages to public services if councils tried to combat problems by increasing prescriptions.

The government has also decided to keep the system of two different rates – one for education, healthcare and Ministry of Defence properties and one for other properties – after 22 respondents said they wanted to keep the double system and 17 rejected the idea of introducing a more complex system of different rates.

The government will publish its draft rateable values for properties on 30 September 2016 before they come into force on 1 April 2017.

Councils will have full control of business rates from 2019-20, but the scheme has been criticised by both council leaders in pilot areas and a joint steering committee from the Local Government Association and Department for Communities and Local Government, who have warned that they could leave councils in low-income areas worse off.

Councils’ income will also be reduced because chancellor George Osborne announced a permanent hike in the threshold at which small businesses have to pay rates in the most recent budget.


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