The British Retail Consortium has stepped up its pressure on the Government over business rates, saying the property tax is “no longer fit for purpose” and is inconsistent with the coalition’s pledge to create the most competitive tax system in the G20.
The consortium is calling for rates to be reduced in order to give struggling retailers help in the current climate and to protect the high street from its “disproportionate burden”.
In a briefing paper, the BRC said that retailers pay £3.05 in business rates for every £1 of corporation tax they pay.
The BRC said: “At present, Treasury models only look at the primary effects of changes to taxation. So a reform of the business rates system that led to a lower tax take would be recorded as a loss.
“The Treasury needs to look at business rates in the round. The secondary effects of reforming business rates will be hugely positive.
“We are exploring what options to reform might look like and options range from changing the way the current tax works through to repealing it completely. We are keen to work on this with Government.
“In other areas, the Government has proved an economic boost occurs when they lower tax. The Treasury took £11.5 billion in income tax in April – a 10% increase on the previous year – despite the top rate being reduced from 50% to 45%. We need a similarly flexible approach to be applied to business rates.”
