Parliament’s influential Treasury Select Committee has today published the findings of its inquiry into the Business Rates system.
Alison McGovern MP, the Treasury Committee’s lead member for this inquiry, said:
“It’s abundantly clear that the current Business Rates system is broken. The tax represents an increasing burden on businesses, particularly those with a physical high street presence struggling to remain competitive.
Odd reliefs here and there are nothing more than sticking plasters to a system in urgent need of reform.”
Having considered what alternative there is to the current system, McGovern continued,
“The Committee was presented with numerous alternatives to the current system, but none of them had been sufficiently modelled to examine who would be the winners and losers of any change. The Government must examine such alternatives in time for Spring Statement 2020.”
The Treasury Select Committee report references the Association of Accounting Technicians (AAT) strong support for annual revaluations and its demolition of arguments for a profits tax.
Phil Hall, Head of Public Affairs & Public Policy at AAT, told East Midlands Business Link: “Most businesses in the East Midlands will know that the country’s business rates system is not fit for purpose, so it’s no great surprise to see the Treasury Committee reach the same conclusion.
There has been much debate about scrapping business rates and replacing them with a sales tax; an energy tax, profits tax, turnover tax or land value tax. Some of these alternatives might be helpful to businesses in the East Midlands, others less so and some may be even worse than what we have already. That’s why AAT concluded the only long term solution is for a cross-party, consultative approach to agreeing a fairer, simpler alternative to business rates – something that this Treasury Select Committee publication could be an important first step in achieving.”
AAT has repeatedly stated that whilst a long term alternative solution was being sought, immediate steps could be taken to improve the current system.
These include, moving from three yearly to annual revaluations, removing plant and machinery from the business rates system and changing transitional relief to ensure that before the end of a rating list, businesses can complete the transition, upward or downward, to their correct rateable value. These issues are all positively addressed within the Treasury Select Committee report.