Originally written by Timothy Adler on Small Business
Parliament’s influential Treasury Select Committee has called on the government to examine alternatives to the broken business rates system.
MPs say that the government should examine alternatives to the current system in time for the chancellor’s Spring Statement 2020.
Unfair business rates penalising small businesses are seen as the number one problem affecting 5.7m SMEs.
>See also: Business rates reform key, says Labour business chairman Rachel Reeves
Business rates are outpacing inflation and growing as a proportion of tax paid by small businesses, say MPs, and this unfair system penalises high street shops and sectors like manufacturing over online businesses.
Experts have warned that high streets face the loss of 200,000 jobs unless the Government acts to revive traditional town centres hit by the rise of internet shopping.
The committee concludes that the complex web of reliefs currently available demonstrate that the current business rates system is broken.
However, MPs are unable to recommend any system to replace the current one, from a sales tax to an energy tax, profits tax, turnover tax or land value tax, as all have their own disadvantages.
Business rates generated £31bn of income for the government in 2018-19.
Alison McGovern MP, the Treasury Committee’s lead member