The retail industry has welcomed a new Treasury select committee report on business rates, which identifies a number of flaws in the current system.
The report found business rates in England and Wales were too high, complex and placed an unfair burden on bricks-and-mortar retailers.
It criticised the implementation of the ”Check Challenge Appeal” system and the current valuation system, and called for clarification on the rates multiplier.
“The number of reliefs that are needed for business rates to work indicate a broken system,” it concluded.
Industry bodies welcomed the report, and demanded that the government “act swiftly” in response.
Helen Dickinson, chief executive of the British Retail Consortium, said: ”We strongly welcome this excellent report. The Treasury select committee has identified key flaws in our broken business rates system.
”Fixing transitional relief, introducing an improvement relief to unlock investment, and better resourcing the Valuation Office Agency (VOA), were all the focus of a letter to the chancellor signed by over 50 retailers in August.
”Any party that wants to support local high streets should commit to implementing the committee’s reforms as a first step. The general election offers a unique opportunity to address some of the imbalances that have contributed to tens of thousands of job losses for the industry.”
However, she added: ”While the committee is right to recommend that government reviews alternatives to the broken business rates system, it must not do this in isolation. Any review must look at the whole suite of business taxation with the aim of creating a tax system that is fit for the 21st century.”
Head of rating at Colliers International, John Webber, said “the committee pulled no punches”.
”They stated that it is unacceptable to bring in a system with so many difficulties without it being tested prior to its implementation,” he added.
”As a result, public confidence has been eroded and the VOA must perform a detailed analysis of its staffing and skills requirements in time for the next spending review. The government should also introduce legislation, which reduces the overgenerous time allowed by the VOA to deal with each element of Check Challenge Appeal. This should be reduced to six months instead of the potential 960 days it currently could take.”
Webber also argued that it was good that the report asked for the government to explain its calculation of the increasing business rates multiplier.
”We are very much of the view that a reduction in the multiplier, an appeal system fit for purpose and a properly resourced VOA, would vastly improve the system.”