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MPs launch inquiry into business rates impact

Published
today Feb 1, 2019
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The Treasury Committee has launched a new inquiry into the impact of the government's business rates policy on high street businesses after months of campaigning by retail experts, trade bodies and big-name retailers.



The parliamentary committee will scrutinise the impact of the property tax, which has been blamed for killing the high street and giving online retailers an unfair advantage, and analyse alternatives such as a digital services tax.

“Many high street businesses are struggling to remain competitive. It has been estimated that 10,000 shops will close this year. Unless action is taken, closures could continue and job losses may soar,” said Nicky Morgan, chair of the Treasury Committee.

“Business rates can represent a substantial financial burden on the high street. The Treasury Committee is therefore launching an inquiry today into the effectiveness and impact of these rates on business.

“We’ll examine how the current system is working and consider whether an alternative system, for example a land-value based tax, may help level the playing field between retailers.”

The inquiry will seek to provide a series of recommendations on the fairness and effectiveness of the current system, and how it could be improved.

The British Retail Consortium has been asking for a business rates reform for years. According to the trade body, retailers will pay an additional £2 billion over the next three years compared to the last three years, adding further pressure to brands amid weakening consumer demand and growing online sales.

The BRC has recommended to freeze the rates for two years to take some of the cost pressure off the industry and have allow time to develop a new business taxation system.

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