LONDON, 2014-2-18 — /EPR Retail News/ — The British Retail Consortium has today published The Road to Reform, a range of ground breaking ideas for the complete reform of the UK business rates system. These innovative options could ensure that customers continue to benefit from competition, provide positive incentives for retailers to invest in property, support the regeneration of the high street and create more jobs to add to the three million people already employed in the industry.
These potential options, that have been designed with BRC members and EY (Ernst&Young), are intended to create imaginative and innovative debate to feed into the Chancellor’s Discussion Document. The BRC welcomes publication of the framework the Discussion Document and is looking forward to engaging with the Treasury on the way forward.
The BRC, along with other business groups, have long argued that the current system of business rates creates disincentives for investment in property and as a result the system is now levying a higher burden on a smaller number of businesses, a situation that is particularly acute in the retail industry. As other taxes have been modernised, the rates system has been left behind and is woefully out of date.
Commenting on today’s proposals Helen Dickinson 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.”
John Rogers (Chief Financial Officer, J Sainsbury), who has chaired the group of executive level members from right across the industry leading the project for the BRC said: “The current system is outdated and cumbersome and does nothing to encourage retailers to invest. We believe we can do better for business and for tax payers and these options represent tangible progress in the debate on what reform could look like if we think about retail in the future, rather than the past.”
The BRC believes that more debate is needed to find ways to remove the disincentive to invest in property, promote growth in jobs, GDP and support entrepreneurs rather than simply tinkering with the existing system.
The potential options we are opening up for further discussion are:
1. Shifting the basis for taxing property by replacing the current system with a tax based on other measures, for example, energy usage
2. Rewarding employment by delivering a discount to the Business Rates bill based on a given value per employee, capped at an overall proportion of company rates bill
3. Supporting successful business by providing a discount to the Business Rates bill based on a percentage of Corporation Tax payment, capped at overall proportion of company rates bill
4. Modernising the existing system by introducing a simplified, banded revaluation system, with revaluations on a more regular basis
Options two and three could be based on the modernised system of business rates outlined in option four but the BRC does not believe that option four alone, simplification of the existing system, would be effective action to remove the disincentive to invest in property.
Potential options one, two & three would enable a future government to deliver outcomes that have been championed by all of the main political parties – those of job creation, increasing energy efficiency, promoting the payment of corporation tax in the UK and tax simplification.
Media Contacts: BRC Press Office 020 7854 8953 – email@example.com