Business Rates are a good tax: The case for
Sam Bowman, Chief Executive of the Adam Smith Institute, put forward an economic case for business rate rises in The Telegraph in February 2016 saying that:
"....under the government’s plans London is the only region that would see a rise in rates overall – everywhere else would see a fall. Even though most of the benefits would pass to landowners, the changes would encourage greater property investment in the country outside of London. If the revaluation doesn’t go ahead, then next time the adjustments might be even bigger, making changes even more difficult....Unless we’re content to freeze rates across the country forever, benefiting London and hurting the rest of the UK, we should hope the government has the will to ignore the special interests and push ahead with this revaluation – or replace rates altogether with something politically easier to manage sensibly."
CBI SETS OUT BUSINESS RATES DEMANDS
Creating a simple, fair and competitive system must be the chief aim of the government's business rate review, the CBI has urged.
The organisation said future changes must be geared towards boosting growth, investment and jobs.
Among the CBI's recommendations are measures to remove the smallest properties from business rates, implement more frequent revaluations and use the Consumer Price Index as opposed to the Retail Price Index.
Katja Hall, CBI deputy director-general, said: "The current business rates system harms businesses by relying on a decades-old model that no longer reflects economic conditions. That's made life tough for retailers in particular.
"These reforms are long overdue so it's good that the government is following through on its commitment to look closely at how it can help alleviate the most onerous aspects of business rates.
"We want a simpler, fairer and more competitive system by having more frequent valuations, removing the smallest properties from paying rates, and using the Consumer Price Index so rates don't outpace inflation."
But Hall said the government must avoid devolving rate-setting powers as this will create an uneven playing field, distort growth across the UK and add extra costs for companies.
The CBI said the government must:
• Conduct more frequent property valuations to "make business rates fairer and more responsive to economic conditions"
• Use the Consumer Price Index, as opposed to the Retail Price Index, will "ensure the burden of business rates does not outpace the official measure of inflation"
• Remove the properties with a rateable value of less than £12,000 from paying rates
• Implement "a clear road map" for longer-term reforms such as online billing and administration