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Business rates are not fit for purpose, says MP

Published: 4 March 2014
A committee of MPs has urged the government to reform business rates in a bid to save the UK high street.
In a report published today on the current state of the retail sector, members of the Business, Innovation and Skills Committee state they want the government to undertake a comprehensive review to examine whether business rates should be based on sales rather than the value of a property.

Commenting on the report, Adrian Bailey MP, chair of the committee, said: "Since the system was created the retail environment has changed beyond all recognition. A system of business taxation based on physical property is simply no longer appropriate in an increasingly online retail world.

"Business rates are not fit for purpose and minor administrative changes will not alter that."

This call for reform is backed by the British Retail Consortium (BRC), which last month published The Road to Reform, highlighting ideas for long term change.

BRC director general Helen Dickinson said: "This report must be the final nail in the coffin of the question: ' do business rates need to be reformed?' They do. Businesses think so. A committee of Parliament thinks so. We very much hope the government will think so too."

Mr Bailey added: "The government's retail strategies are full of warm words that fail to address the most debilitating levy on existing businesses and the most crucial deterrent to new businesses appearing on the high street - business rates. Fewer strategies are required, simple, decisive action is needed."

The committee has also urged the government to consider a six-month amnesty on business rates for businesses occupying empty properties in a bid to encourage new businesses to high streets.

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