Business Rates 'Need Reform' Say MPs

Poll Shows Most MPs Believe Current System Unfit For Purpose

03.07.2014

Fergal Dowling, Partner | +44 (0)121 214 5476

Most MPs believe the present system of business rates is not fit for purpose, according to a new poll by the British Retail Consortium (BRC).

The study found there was widespread consensus across the different parties that the system has to change.
Eighty per cent of parliamentarians agreed with the statement that the present regime is "not fit for purpose and in need of fundamental reform", while 93 per cent agreed that "reform of business rates is an important area for the future success of the high street and town centres".

In response to the news, the BRC has called on the party leaders to sign up to a commitment to include reform of business rates in their 2015 election manifestos. Indeed, the views of MPs may carry considerable weight during such planning as they seek to ensure the success of SMEs in their constituencies.

The BRC is also publishing Manifesto Milestones, which it describes as the next step in its campaign for an overhaul of business rates to be in place by 2017.

Among the measures the BRC wants to see included are business rates cut, more flexibility in the rates linked to economic performance in a similar way to other taxes, a more equitable sharing of the rates across the economy and the inclusion of incentives aimed at promoting energy efficiency.

Commenting on the research findings, BRC director general Helen Dickinson said: "It is no longer an option to say that fundamental reform is too difficult or complicated - that particular ship has sailed. The challenge for politicians is to show us all how they are going to embrace the task of reform and deliver, with us, a system that is fit for the 21st century."

The issue of small business taxation has been part of the political agenda for some time, with the coalition agreement in 2010 pledging to carry out a "wholesale review" of small business taxes and "find a practical way to make small business rate relief automatic".

Expert Opinion
It is interesting to see broad cross-party opinion that the business rates system is not currently fit for purpose. With the Government regarding SMEs as crucial to driving forward the economy after a difficult few years, it is likely that debate around this issue and how it impacts on smaller firms will continue for some time.

"Tax can be an incredibly complex area, so it is vital that businesses always have a proper understanding of their responsibilities in relation to this issue. Central to that is having access to legal specialists who can provide support on compliance and help SMEs to get to grips with the key issues they need to consider in this area."
Fergal Dowling, Partner