The government launched its review of business rates today as it promised radical changes to the system, admitting the circumstances facing retailers has “changed beyond recognition” since rates first came in.
Chief Secretary to the Treasury, Danny Alexander, said the review, set to report back by the 2016 Budget, would look at how businesses use property, what the UK can learn from other countries about local business taxes, and how the UK could modernise the system so it better reflects changes in the value of property.
Business have been asked to respond to a list of 15 different questions as part of a consultation which will feed into the review, including coming up with evidence to support the case for change and to back up claims that the system is unfair.
The Treasury also said it wanted traders to come up with supporting evidence for potential alternative systems, including how rates could be reviewed to give better support to SMEs.
“Our system of business rates was created nearly 30 years ago,” said Alexander. “Since that time, the worlds of commerce and industry have changed beyond recognition. I’ve been impressed by the representations made by the business community and I know that business rates are a considerable cost.”
BRC director general, Helen Dickinson, described business rates as a “major drag” on the high street and said it was important the consultation brought about “sweeping” reform.
“We supported the government’s decision back in December to take a proper look at the inequities of this system and today’s announcement from the Chief Secretary of a ‘radical’ review is great news for all of us who want a fairer, more efficient and sustainable system.
“From the breadth of the questions that the review is to address it’s clear that the government intend to take a broad and open-minded approach to finding solutions. That will meet with strong support in the business community.”
ACS chief executive James Lowman added: “We welcome this overdue review, and we are pleased that it will take a look at radical options for reforming the outdated business rates system.”
However, Labour accused ministers of dressing up today’s announcement as a new policy.
Shadow secretary to the Treasury, Shabana Mahmood, said: “Britain’s businesses need more than just a re-announced review. Labour will take immediate action by cutting and then freezing business rates for 1.5 million small business properties.”
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