The Treasury Committee has launched an inquiry into the UK’s business rates system, in order to assess the impact of business rates on firms.
The Committee intends to examine how changes in government policy have altered the business rates system. It will also analyse ‘how the current business rates system is operating’.
Additionally, the inquiry will assess the ‘economic justification’ for a property-based business tax, taking into account the impact of business rates on rental prices and property prices. The Treasury Committee also stated that it will consider alternatives to property-based business taxes, such as the proposed Digital Services Tax.
The Federation of Small Businesses (FSB) welcomed the inquiry. Mike Cherry, its National Chairman, said: ‘The FSB has worked with the government to secure a set of reforms to business rates since 2016 – doubling small business rate relief, linking annual rises to CPI, transitional relief, and now a high streets discount.
‘The tax, however, remains regressive, and not linked to ability to pay.
‘We welcome the inquiry as the next step in building on the recent work to help, and sort out a modern tax system that balances the need to fund public services with protecting our vibrant 5.6 million-strong small business community.’