Some of Britain's biggest businesses including Marks & Spencer, Sainsbury's, Tesco, General Motors and Tata Steel have called on the government to rip up the current business rate regime claiming the current system is “a critical problem for all of British business”.
The controversial tax delivers around £25bn to the Treasury every year, but has been blamed for the demise of the high street in recent years, with many businesses claiming it has added to their financial burden at a time of economic strain.
So far the government has committed only to reviewing the system, but there is concern this will not go far enough. Business rates are currently calculated through a valuation of Britain’s property and the annual rate of inflation, which is revalued every five years.
More than 100 companies have signed an open letter to the leaders of all parties urging for reform, arguing the “the current system of business rates is no longer fit for purpose in the 21st century”, and that all parties should commit to “fundamental reform in their manifestos for the next general election”.
The letter adds:
Business rates are higher than property taxes anywhere else in Europe and are the second highest in the OECD. This is a critical problem for all of British business... Manufacturers, retailers, the hospitality trade, property, service industries and businesses large and small are all held back by business rates.
The letter argues that 93 per cent of MPs believe fundamental reform of business rates would “revitalise our high streets and town centres”.
A modern, sustainable and transparent system would unleash investment that could bring skilled and entry level jobs and new and expanded businesses into our local communities. Those who seek a competitive tax regime as a draw for investment and jobs should apply that logic to business rates.
Signatories to the open-letter
British Beer & Pub Association
British Property Federation
Federation of Small Businesses
National Hair Dressers’ Federation
Association of Licensed Multiple Retailers
British Retail Consortium
Risk Capital Partners
John Lewis Partnership
Westminster Property Association
Insite Asset Management
New River Retail Ltd
Picton Capital Limited
Crabtree & Evelyn
Freight Transport Association
Business Centres Association
New Westend Company
Forum for Private Business
British Aggregates Association
Henderson Real Estate
Holland & Barrett
Rural Shop Alliance
Recruitment & Employment Confederation
Cushman & Wakefield’s
UK Petroleum Industry Association
The Buildings Futures Group
British Chambers of Commerce
2 Sisters Food Group
Association of Convenience Stores