The Conservative Party has vowed to lift the “overall burden” of business rates at its first Budget review, if it wins next month’s General Election.
Ahead of a planned speech at today’s Confederation of British Industry conference, the party stated: “Business rates are one of the top concerns of British businesses, so a Conservative majority government will launch a fundamental review at our first Budget, consulting widely.
“We will reduce the overall burden of business rates as part of this review.”
The party has also outlined plans to increase employment allowance from £3,000 to £4,000, which it said would cut National Insurance for more than half a million businesses by up to £1,000.
Helen Dickinson, chief executive of the British Retail Consortium, said that while the pledge was welcomed, “additional fixes” are necessary in the shorter term.
“The offer to cut business rates for SMEs is welcome, but will not slow the decline in high streets that has seen many household names disappear in recent years,” she said.
“The Conservatives should commit to supporting investment and growth in retailers large and small, particularly as the majority of the UK’s 3m retail workers are employed in businesses that will not benefit from the Conservatives’ proposed rates cuts.
“The next government should reduce the tax burden further, through business rates reforms including scrapping ‘downwards transition’, which costs retailers £1.3bn; freezing next year’s rates increase; and introducing an improvement relief to encourage investment in our high streets.”
Robert Hayton, head of UK business rates at real estate adviser Altus Group, said Boris Johnson would be “going over old ground”, since the government’s response to a previous review at the March 2015 Budget would have already addressed the “tough questions”.
He added: “Business of all sizes will, however, be delighted to hear of the commitment to lower the overall burden, as we are far too reliant upon property for tax revenues, with UK property taxes the highest across the EU and the standard rate of tax at its highest level since 1990.”
Ed Cooke, chief executive of Revo, said: “Business rates is an outdated and uncompetitive tax, which weighs heavily on town centres and high streets where a spate of business failures can be attributed to this ever-increasing fixed cost.
“Reliefs for small business are welcome, but overlook the vast economic contribution made by major retailers. We urgently need a root-and-branch reform, and within that it is critical to recognise the value created by online sales in the modern retail economy.
“We challenge all political parties to turn rhetoric on business rates into action in 2020.”
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