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MPs Recommend Business Rates Reform Across the UK

ATCM Makes Contribution to Treasury Committee Report Published Last Week (31 October 2019)

The Treasury Committee has recommended the reform of the business rates system across the UK following an inquiry into how the system is operating. It follows a lengthy consultation process launched in the early part of 2019 which came hot on the heels of the ‘High Street 2030’ inquiry from the Housing, Communities and Local Government Committee.

The report ‘The Impact of Business Rates on Businesses’ identifies the current system as inadequate and urges the Government to consider a regime that is more responsive to economic trends.

Read ‘The Impact of Business Rates on Business’ Report

It found that, although the system of reliefs was there to ease the burden on businesses, it had got to the point where they added complexity to an already confusing tax system, were arbitrary in some cases, and were applied inconsistently. They are not seen as a panacea by the Committee.

Also coming in for criticism was the appeals system with it being noted that the Valuation Office Agency in England is still dealing with cases from the 2010 listings.

The report clearly outlines the need for structural reform stating:

“Tweaking current system of business rates through an increasingly complex web of reliefs does little to address the negative aspects of this tax and simply demonstrates how broken the system is. Given the changing nature of the economy, and with high streets on the decline, the Government needs to be curious, proactive and creative in exploring alternative options to such an important source of revenue.”

Following the submission of a paper to the Committee in partnership with The BID Foundation, and an appearance at an oral evidence session in June, ATCM is satisfied with the headline conclusions reached by the MPs, although we will be carefully examining the details to help Government construct a way forward. However, we are in little doubt that many MPs are already in favour of business rates reform. It is the process of identifying viable alternatives, and doing so in a context where politicians are currently distracted by other matters that remains the critical challenge to achieving reform.

The lobbying must continue.