Pressure mounts on Osborne to act on business rates
The Chancellor George Osborne has been urged by the business community to act to reform the unpopular business rates system.
The national trade organisations the British Chambers of Commerce (BCC), the Federation of Small Businesses (FSB) and the Confederation of British Industry (CBI) all believe that the system needs complete a overhaul and have all spoken out ahead of the Chancellor’s Autumn Statement on December 3.
This pressure from the business community comes two weeks after we launched our campaign to persuade the Government to conduct an immediate reform of the business rates system. We have also called for the rates to be frozen while this review is carried out.
The rates, the highest form of business property tax in the European Union, are regarded as the most pressing issue facing the business community and some of the largest and most influential business and trade organisations have lobbied hard in an attempt to have them overhauled.
The BCC says that it wants to abandon up-rating of business rates until the 2017 revaluation, with HM Treasury ensuring the freeze is UK-wide and commit to a thorough review of the broken business rates system to be completed in 2017 and implemented by 2022.
Meanwhile Nicola Walker, the CBI’s director for business environment, is clear on how she thinks business rates can be reformed. She said: “We’ve got one of the least competitive business rate tax systems in the world and we think there needs to be a fundamental review of the system.
“We believe business rates should be linked to rental values rather than land values and should recognise the disproportionate impact they have on small and medium-sized enterprises by exempting properties with a rateable value below £12,000 from the system completely.”
FSB, which has 200,000 members nationally, agrees that a review is needed.
John Allan, FSB National chairman, said:“FSB members have been calling out for the business rates system to be reformed for a long time. In the short term we need to see relief measures for small business continued, and we would look to whoever forms the next Government to commit to fundamental reform of the system.”
The Government says its business rates review in three years’ time will look at improving the longer-term administration involved in the rates so the system is simple, fair and predictable for ratepayers. claiming that a 2015 review would have resulted in an increase for many businesses.
Penny Mordaunt, the High Street minister, said: “Looking forward, our business rates review will look at improving the longer-term administration involved in the rates so the system is simple, fair and predictable for ratepayers.”
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