The British Retail Consortium has set out four options for reforming the UK business rates system, which include linking the rates to energy use and rewarding businesses for the number of staff they employ.
Options include replacing the current system with a tax based on other measures, such as energy usage or rates based on the number of staff retailers employ, with businesses given a discount for each employee.
The BRC has also proposed a system in which retailers would receive discounts dependent on the amount of corporation tax paid, with a cap for the overall total.
A fourth suggestion is to simplify the banded revaluation system, with revaluations on a more regular basis, although this is the least preferred option.
BRC director general Helen Dickinson said: “We have a once-in-a-generation chance to fundamentally change the business rates system and the time is right to think creatively and in the best long term economic interests of the UK.
“These potential options would be good for the public, the economy and businesses small and large, while still providing significant tax revenues for the government. We now intend to analyse each one in more detail and very much hope that we will stimulate discussion that goes beyond tinkering with the existing system.”
John Rogers, chief financial officer of BRC member Sainsbury’s, called the current system “outdated and cumbersome” and added it “does nothing to encourage retailers to invest”.
Rogers said: “We believe we can do better for business and for tax payers and these options represent tangible progress in the debate on what reform could look like if we think about retail in the future, rather than the past.”
The BRC, which has for years contested the current business rates system, published The Road to Reform in collaboration with its members and Ernst & Young.