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Business Rates Reform

Volume 656: debated on Thursday 14 March 2019

The petition of residents of the United Kingdom,

Declares that the current business rates system is out-of-date, unfair and is undermining the viability of our high streets, our hospitality industry and many small businesses across the UK.

The petitioners therefore request that the House of Commons urges the Government to carry out an urgent review and reform of the Business Rates system to help protect the future of the UK High Street and create a level playing field for all businesses.

And the petitioners remain, etc.—[Presented by Rachael Maskell, Official Report, 30 October 2018; Vol. 648, c. 883.]


Observations from the Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak):

The Government are committed to promoting vibrant and sustainable high streets and town centres to enable them to grow and create jobs. At the 2018 Budget, the Chancellor announced Our Plan for the High Street, a long-term plan to help our high streets and town centres evolve as consumer habits change. This delivers long-term support including a £675 million Future High Streets Fund to make high streets and town centres fit for the future; planning reforms to create more homes, jobs and choice in town centres; and a High Streets Task Force to support local leadership.

As part of this plan, the Chancellor also announced one third off the business rates bills of small retailers, including shops, restaurants, cafes and pubs. This discount will be available for two years from April 2019 to retail property with a rateable value below £51,000, subject to State aid, which is worth an estimated £1billion.

This is in addition to recent wide-ranging business rates reforms benefiting all ratepayers. In total, since Budget 2016 the Government have announced a range of reforms and measures worth over £13 billion in England over the next five years, including switching from RPI to CPI indexation, raising the threshold of the standard multiplier, and making Small Business Rate Relief more generous so that 655,000 of the smallest businesses now pay no rates at all.

The Government undertook a fundamental review of business rates in 2016, including seeking views on alternatives to a property based business tax. The majority of respondents were in favour of retaining a property based tax. There was no consensus on an alternative tax base, and even those respondents who put forward alternatives were clear these were not without issues.

Separately at Budget 2018 the Government announced a Digital Services Tax (DST). This is to address the concern that current international corporate tax rules do not reflect how social media platforms, search engines and online marketplaces derive value from user participation. This is a targeted and proportionate interim measure, pending global reform. The DST is due to raise approximately £1.5 billion over four years for the public finances, helping to ensure digital platform businesses make a fair contribution to the public finances.

The Government keep all taxes, including business rates, under review.