The Treasury has launched an inquiry into Business Rates to “scrutinise” how changes in policy since 2017 have impacted on business.
The report, published by the Treasury Committee, will look at Business Rates retention, alternatives to property-based taxes, such as the proposed digital services tax, and how changes to Business Rates could impact businesses.
“The inquiry will look at how changes in Central Government policy have changed the business rates system,” the report reads. “In turn, this inquiry will also look at how the current business rates system is operating and the associated impact on business.”
The news comes as recent research suggests that UK shops are closing at a record rate of around 14 a day, with sky-high Business Rates at the heart of the problem.
While recent Government policies have attempted to address rising rates, experts say the current system does not work for small businesses.
Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said: “FSB has worked with Government to secure a set of reforms to business rates since 2016 – doubling small business rates relief, linking annual rises to CPI, transitional relief, and now a high streets discount.
The tax, however, remains “regressive and not linked to ability to pay”, said Mr Cherry.
“A small business on the high street is hit by business rates before it makes its first £1 in turnover, let alone profit. These small firms are the lifeblood of our high streets, town centres and local communities.”
The FSB, which represents around 160,000 small business members in the UK, added that it welcomes the inquiry, which provides an opportunity to “sort out a modern tax system” that balances both public finances and the needs of business owners.
The Impact of Business Rates on business inquiry can be found here. The deadline for written submissions is 02 April 2019.