04 Mar 2014
The business rates system must be fundamentally reformed if it is to play a viable role in the economy, according to a committee of MPs.
The Business, Innovation and Skills Committee has warned that the existing system is not fit for purpose, and has called for a study into whether retail tax should be based on the value of sales, rather than the value of commercial property as is currently the case.
The committee’s report marks the latest in a recent succession of calls for reform of the business rates system, from some of the UK’s leading business groups.
The committee has also called for the introduction of a separate tax system for retailers.
The Government recently announced plans to review business rates, which included proposed changes to the frequency and methods of valuation.
Adrian Bailey, committee chairman, commented, ‘Since the system was created the retail environment has changed beyond all recognition. A system of business taxation based on physical property is simply no longer appropriate in an increasingly online retail world’.