A consortium of retailers is calling on the government to conduct major reforms of how business rates are paid, recommending taxation on energy usage.
The Business Retail Consortium (BRC) made the recommendation in a report published on Tuesday, which also calls for a major shift in the way property is valued.
The report, Road to Reform, which was collated in a joint enterprise between the BRC and EY auditing firm, says the current business rates system is “no longer fit for purpose” because it “disincentivises expansion and investment in property and creates an upwardly spiralling burden of costs for those in physical premises”.
It adds that the current business rate system is “woefully out of date” and is “levying a higher burden on a smaller number of businesses”.
Recommendations include introducing a tax on energy use rather than taxing property, rewarding employment through the introduction of discounts to business rate bills based on a value per employee, rewarding successful business by introduction of further discounts based on corporate tax payments and introducing a simplified, banded revaluation system with revaluations on a more regular basis.
According to the BRC, implementation of these measures will boost jobs, increase energy efficiency and encourage tax payments, policies that have been championed by all the major political parties.
Helen Dickinson, director general of the BRC said, “We have a once in a generation chance to fundamentally change the business rates system and the time is right to think creatively and in the best long term economic interests of the UK”.
“These potential options would be good for the public, the economy and businesses small and large, while still providing significant tax revenues for the Government. We now intend to analyse each one in more detail and very much hope that we will stimulate discussion that goes beyond tinkering with the existing system.”