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MPs condemn 'broken' business rates system

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.”



Readers' comments (2)

  • Report took long enough and i think anyone in the retail sector could have told them this without the no-doubt huge costs of doing a report.
    So now the challenging question for the MP's. What are they going to do about it?
    If this report is so excellent i am assuming it has excellent suggestions on how to fix the problems, time scales, implementation strategies and of course cost implications to all parties..........
    Retail needs this now not in 10 years time while our MP's discuss between themselves. About time these MP's actually ran the country !!!

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  • Absolutely nothing new here. The report simply confirms what we have all known for years; apart from a few short-term fixes there are no proposals for reform or replacement of a broken system.

    Our industry's leaders (and the BRC) must lead! We cannot wait for government to discover the answers. We must propose the solution and stop repeatedly highlighting the problem.

    My consistent answer is to abolish the entire rotten system and replace with an increase in VAT, the simplest and cheapest tax, and one that applies to on-and off-line sales equally.

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