However, BBC Business reports that the outcome is expected to be fiscally neutral, meaning that the total sum collected from businesses will not change.
“The time has come for a radical review of this important tax. We want to ensure the business rates system is fair, efficient and effective,” said Danny Alexander, chief secretary to the Treasury.
The Treasury said the review will look at how firms use property, what the UK could learn from other countries and how the system could be modernised to better reflect changes in property values.
Firms will regard this as a missed opportunity to tackle a huge brake on investment and growth
John Longworth, director general of the British Chambers of Commerce, welcomed the review but said “actions speak louder than words”.
“Unless a root and branch reform of business rates is delivered at Budget 2016, firms will regard this as a missed opportunity to tackle a huge brake on investment and growth,” he added.
The rates paid by English businesses are the highest of any European Union country and can be a company’s biggest expense after wages and rent.
Rates have been blamed for the decline of many High Streets and the rising number of vacant shops.
Business rates are calculated according to the rental value of the property a company uses. They date back to the Poor Law established in 1601.
Current valuations are still based on property prices in 2008, before the economic downturn hit the value of commercial real estate, as the government postponed a revaluation scheduled for last year.
