Business Rates – time for a change?

 

As the Chancellor’s March Budget statement approaches, calls for a complete overhaul of business rates have been growing.

The British Retail Consortium (BRC), several large manufacturers (including Tata Steel and Vauxhall), ex Tesco boss Sir Terry Leahy and a number of MPs have been among them. There seems to be general agreement that the current tax regime needs reform.

Some, principally the BRC, have put forward alternative suggestions, one of which is to replace the property-based tax with an energy tax.  There is no doubt that for High Street retailers the payment of rates, set at pre-2008 crash property valuations, has posed a particular challenge given the competition they face from online shopping and changing consumer habits.

But, as the British Chamber of Commerce has pointed out, business rates affect all sectors, not only retail.

The BCC is right to highlight the burden placed by this tax on all businesses. 

There will doubtless have to be a thorough review before any new system is introduced and perhaps now it is appropriate for a more nuanced approach to be considered.

There may be scope for a scale of charges tailored to different sectors of the economy, or tailored to the size of a business, or one based on the number of employees in a premises, which may achieve political as well as tax collection objectives.

We need to support both SMEs and employers to promote jobs and people on whom the economy is depending for growth.

Do you have any suggestions for the Chancellor on a fairer way of assessing business rates?

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