The Labour Party has today proposed scrapping business rates and replacing them with a tax that would have the following objectives:
- Reducing the overall burden of taxation
- More frequent revaluations and 'instant' reductions in bills when property values fall
- Incentivising business investment and the use of empty properties
It is not clear what the basis or scope of any replacement to rates would be. The Labour Party is simultaneously proposing to increase the Digital Services Tax from 2% to 12% for 2022/23 to fund a £2.1bn cut in business rates for 'small businesses and the high street', but it is not clear whether taxes on online activity would be part of wider business rates reform.
It is welcome to see recognition of the deleterious impact of business rates on retail and the high street, but we need see more detail before knowing the full impact of this proposal on the retail industry.