BlogLatest NewsBusiness rates not fit for purpose, MPs say

Business rates not fit for purpose, MPs say

Business rates are not fit for purpose and need a complete overhaul, MPs say in a report on Tuesday.

Joining a chorus of critics, they call for the Government review into the future of business rates to be extended to consider whether retail taxes should be based on sales rather than the rateable value of a property.

The MPs want the review, set up by Chancellor George Osborne, to look at the merits of giving retail its own business taxation system.

In their report, the Business, Innovation and Skills committee calls for an interim 2pc cap on increases in business rates until the Government delivers fundamental reform. They also want the six-month rates amnesty for businesses occupying empty properties to be more generous than the 50pc relief announced to encourage newcomers to depressed high streets.

“British retail is a global success story, but its traditional home, the high street, is struggling under a system of business rates that comprises one of the highest forms of local property tax in the European Union,” said Adrian Bailey, the chairman of the MPs’ committee.

David Cameron, the Prime Minister, has backed calls for a “fundamental reform” and a discussion paper will be published in the spring outlining options for change.

Ministers have earmarked £415m of business rate cuts and infrastructure investment, including a £1,000 discount for 300,000 small retailers, but high street chains want to see the abolition of a property-based taxation system.

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