The British Retail Consortium (BRC) has called for the government to review the business rates system, which is “strangling our high streets”.
In a submission to the Treasury select committee today (1 April), the BRC called for the government to set up an independent review of business taxation.
It urged the committee, which is conducting an inquiry into business rates, to look at how taxes such as VAT, corporation tax, business rates, payroll taxes, and taxes not yet used in the UK, such as land value taxation, might be levied on business to ensure a tax framework fit for the 21st century.
With business rates set to rise again next month, the BRC called for an end to the “burden” on businesses, which it said was contributing to the rising number of store closures and discouraging new businesses from taking over empty shops.
Since the current business rates regime began in 1990, the tax property tax has risen 45% from 38.4p in the £1 to 50.4p.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Retail is in the midst of a transformation, as new technologies and changing consumer behaviour impact the way we shop. The investment needed for this re-invention is being held back by a rising tide of public policy costs, and business rates is the biggest among these.
“Retail accounts for 5% of the economy, yet pays 10% of all business taxes and a staggering 25% of business rates. This is simply not sustainable – the raft of shop closures and job losses are testament to that.
“While government fiddles at the edges, retail suffers and consumers pay the price. The Treasury select committee inquiry comes at a critical moment for the retail industry. If the committee can seize the opportunity to find a way to address the madness of a system which is strangling our high streets, they can protect shops and jobs and put British retail on the right trajectory for the future.”