On March 28th, the BRC alongside tax and business advisers from MHA MacIntyre Hudson met with retailers to discuss options of reform to the current structure of Business Rates and assess its direction of travel.
After the BRC presented on the background and context of the current Business Rates debate, MHA MacIntyre Hudson provided a helpful perspective on how business tax works in countries around the world, and some further insight into the proposed Digital Services Tax.
Retailers were clear that they found the Business Rates system burdensome and unwieldly, particularly the operation of the Valuation Office Agency’s (VOA) appeal system and the effect of ‘downwards phasing’, where supposed falls in rates bills for some following revaluations are limited due to the need to subsidise those who face rises in their rates bills. The ability of the VOA to manage the current system also cast doubt on their ability to conduct the mooted idea of annual revaluations.
Attendees discussed possible alternatives to Business Rates, such as an online sales tax. The extent to which this was supported varied, sometimes according to the proportion of sales conducted online by member companies, and the point was made that it would still be the retail sector that would shoulder the burden of any such tax. The debate moved on to whether the real issue wasn’t online vs offline but town centre vs out-of-town, and whether landlords should be made to shoulder a higher share of the burden of any property tax. Other alternatives were discussed, such as an increase in Corporation tax, VAT or new ‘green’ taxes, and it was felt that all had pros and cons, and that there was no ‘silver bullet’ that would solve the problem.