Calls are growing for a reduction in business rates to help boost the UK’s economic recovery as it battles with the impact of the Covid-19 pandemic.
Targeted support for specific sectors is another key lever the government should use, according to a new survey of chartered accountants.
Both measures are seen as the most effective ways to help the struggling high street and boost the economy, according to the Institute of Chartered Accountants in England and Wales (ICAEW).
Its survey of ICAEW members working in businesses across every economic sector and UK region found that 62 per cent of respondents said a reduction in business rates would help boost the recovery.
Iain Wright, ICAEW’s director of business and industrial strategy, says it is clear more intervention will be needed from government.
He said: “Some struggling companies could fail when faced with inflexible business rates bills.
“Reducing the business rates multiplier would bring down the cost of this charge, and therefore lessen the burden on companies at this critical time.”
ICAEW says the government needed to review its strategy and consider a sectoral approach to fixing the damage caused by the pandemic, to help sectors such as hospitality, leisure and retail which are still struggling.
Iain Wright added: “Although the whole economy is suffering, it is striking that the economic effects of the pandemic affect some sectors with much more brutal damage than others.
“Targeted sectoral policy measures from government have been seen to work earlier in this crisis.”
The call comes as property consultancy Colliers International has warned companies that occupy office space need to receive reductions in their business rates given the longer-term impact Covid-19 and lockdown has had on the sector.
It says that an “unprecedented” number of companies are attempting to reduce their business rates bills.
Its figures show that around 170,000 businesses have taken the first step towards appealing against their rates since the pandemic began in the UK in March. That is more than the total number in the three previous years.
Colliers says that unlike businesses in other sectors such as retail and hospitality, who have been given a one-year rates holiday and have been supported by various grants, office-based businesses have received no rates holidays to date and only the smallest businesses have been able to benefit from the government grant scheme.
John Webber, head of business rates at Colliers, said: “We are seeing the number of appeals go through the roof as businesses challenge their current assessments on the grounds of reduced profitability due to the pandemic.”
He added: “Many businesses in the office sector have been badly impacted by Covid-19; revenues have been hit and costs have risen, particularly as many businesses tried to adapt to new rules and regulations with the ‘Safe return to the office’ policy in the summer.
“The government’s latest policy calling for ‘Working from Home’ until next spring has caused further disruption, often impacting on productivity, and we now have some city centre offices either empty or only partially occupied but rate payers still expected to pay full rates.”