Business rates reform on the Government’s agenda in the coming Parliamentary session

The Queen’s Speech outlined the legislation that the Conservative government intends to enact over the coming year. This year’s Queen’s Speech contained 38 bills and draft bills. The speech, delivered by Prince Charles in the Queen's absence, allows the Government to unveil its legislative plan for the next session. It includes proposals for laws including energy security, carbon emissions and post-Brexit economic arrangements.

Below is a review of the Queen’s Speech focusing on the announcements of interest from a tax / economic / business policy point of view.

Economic Crime and Corporate Transparency Bill (UK) - this aims to tackle illicit finance, reduce economic crime and help businesses grow. There are major announcements in this bill, including:

• Broadening the Registrar of Companies’ powers so that they become a more active ‘gatekeeper’ over company creation and custodian of more reliable data, including new powers to check, remove or decline information submitted to, or already on, the Company Register
• Introducing identity verification for people who manage, own and control companies and other UK registered entities. This will improve the accuracy of Companies House data, to support business decisions and law enforcement investigations.
• Providing Companies House with more effective investigation and enforcement powers and introducing better cross-checking of data with other public and private sector bodies.
• Tackling the abuse of limited partnerships (including Scottish Limited Partnerships), by strengthening transparency requirements and enabling them properly wound up.
• Creating powers to seize and recover crypto assets, which are the principal medium used for ransomware more quickly and easily. The creation of a civil forfeiture power will mitigate the risk posed by those who cannot be criminally prosecuted but use their funds to further criminality.
• Enabling businesses in the financial sector to share information more effectively to prevent and detect economic crime.

Draft Digital Markets, Competition and Consumer Bill (UK) – proposals in this bill include tackling subscription traps, update consumer law to prohibit commissioning fake reviews and strengthening protections for consumers using Christmas savings clubs and other similar schemes, which are not currently regulated. In what is likely to be a large bill, we will see updating and simplifying regulations for package travel and giving the Competition and Markets Authority the ability to decide for itself if consumer law was broken, and to issue monetary penalties for those breaches. This bill will also include improvements to the quality and oversight of services offering dispute resolution. Perhaps of most relevance to our work, is to empower the Digital Markets Unit to designate a small number of firms who are very powerful in particular digital activities, such as social media and online search, with Strategic Market Status. This status will lead to these firms facing legally enforceable rules and obligations to ensure they cannot abuse their dominant positions at the expense of consumers and other businesses.  And t will give the Digital Markets Unit powers to proactively address the root causes of competition issues in digital markets. It will impose interventions to inject competition into the market, including obligations on tech firms to report new mergers and give consumers more choice and control over their data.

Non-Domestic Rating Bill (England and Wales) – we can look forward to shortening the business rates revaluation cycle from five to three years from 2023, improving the valuation accuracy and timeliness in a shorter revaluation cycle through new duties on ratepayers, with measures to support compliance. Furthermore, the Valuation Office Agency will have the power to provide ratepayers with information on the calculation of their rateable value and tightening appeals against rates on the basis of changing circumstances. The Government will introduce new 12-month rates relief on increases to rateable value arising from improvements made to a property, and a new 100 per cent rates relief for low carbon heat networks that are assessed as separate entities for business rates.

Levelling Up and Regeneration Bill (England and Wales) – the main elements of this bill will be to place a duty on the Government to set ‘Levelling Up missions’ and produce an annual report updating the country on delivery of these ‘missions’. We may see a new model of combined authority: the ‘County Deal’ which will provide local leaders with powers to enhance local accountability, join up services and provide transparent decisions to rejuvenate their communities. Other notable moves include a new powers for local authorities to bring empty premises back into use and instigate rental auctions of vacant commercial properties in town centres and on high streets, something that was reported on by the media over the weekend.

UK Infrastructure Bank Bill (UK) - the British state-owned investment bank will be fully operational with a clear policy mandate to support economic growth, including at a regional and local level, and the delivery of net zero. Protecting the Bank’s operational independence is a priority and so is enabling the bank to play a key role in delivering public sector infrastructure projects, says the speech.

Electronic Trade Documents Bill (UK) – It aims to modernise long-standing statutes such as the Bills of Exchange Act 1882 and the Carriage of Goods by Sea Act 1992, removing the legal obstacle to the use of trade documents in digital form and ensuring that such documents have the same effects as paper counterparts, and allowing the adoption of new digital solutions which bypass the need for paper and wet ink signatures. And the bill will ensure that trade documents in electronic form meet certain criteria designed to replicate the key features of paper trade documents.

Draft Audit Reform Bill (UK) – we could see the establishment of new statutory regulator the Audit, Reporting and Governance Authority, new measures to open the market and bringing the largest private companies in scope of regulation in the definition of ‘public interest entities’. The Bill will give the new regulator effective powers to enforce directors’ financial reporting duties, to supervise corporate reporting, and to oversee and regulate the accountancy and actuarial professions, and reforming the regulation of Insolvency Practitioners.

Brexit Freedoms Bill (UK) – The ‘B’ word is back and this bill will creating new powers to strengthen the ability to amend, repeal or replace the large amounts of retained EU law by reducing the need to always use primary legislation to do so. It will remove the supremacy of retained EU law as it still applies in the UK, and clarifying the status of retained EU law in UK domestic law to reflect the fact that much of it became law without going through full democratic scrutiny in the UK Parliament.

Procurement Bill (England, Wales and Northern Ireland) - the bill will enshrine in law the objectives of public procurement, requiring buyers to have regard to the Government’s strategic priorities for public procurement, clearer arrangements for how contracting authorities can buy at pace, tackling unacceptable behaviour and poor performance through new exclusion rules and reforming the Single Source Contract Regulations.

Data Reform Bill (UK) – the Government wants public bodies to share data to improve the delivery of services, and design a more flexible, outcomes-focused approach to data protection that helps create a culture of data protection, rather than ‘tick box’ exercises.

Trade (Australia and New Zealand) Bill (UK) – the legislation will provide a power to amend UK procurement regulations to implement the obligations in the Government Procurement chapters of the Australia and New Zealand Free Trade Agreements.

Harbours (Seafarers’ Remuneration) Bill (UK) – this will empower ports (statutory harbour authorities) to surcharge ferry operators if they do not pay the equivalent of the National Minimum Wage and to suspend them from access to the port. And there is promise of reform of Tonnage Tax to make it easier for maritime businesses to set up in the UK.

Social Security (Special Rules for End of Life) Bill (GB) – the bill will amend the definition of terminal illness in existing legislation, so that individuals who are considered by a clinician as having 12 months or less to live (rather than the current six months) can have fast-tracked access to important disability benefits.

Boycotts, Divestment and Sanctions Bill (UK) – this is an attempt to prevent public bodies engaging in boycotts that ‘undermine community cohesion’ and where these are inconsistent with official UK government foreign policy. This includes preventing public institutions carrying out independent boycotts, divestments and sanctions.

Early political reaction:

PM Boris Johnson said: "However great our compassion and commitment, we cannot simply spend our way out of problems. We need to grow our economy out of these problems by creating hundreds of thousands of high-waged, high-skilled jobs across the country." Labour leader Sir Keir Starmer said: "This country faces great challenges, but at the same time great opportunities are within our reach. We need a government of the moment that meets the aspirations of the British people." Sir Keir said that the Queen's Speech had provided ‘a pathetic response to the cost-of-living crisis’, calling it bereft of ideas and without a guiding principle or a road map for delivery. Opposition parties focused on the cost of living, with Liberal Democrat leader Sir Ed Davey saying millions of households would be bitterly disappointed by the Queen's Speech. SNP Westminster leader Ian Blackford accused ministers of a ‘deafening silence’ over potential rises in poverty, saying they had to deliver desperately needed support to put money into people's pockets.

The Queen’s Speech is available here.

By Hamant Verma, CIOT Senior External Relations Officer