The British Property Federation has added its voice to the calls for a fundamental shake-up of the business rates system.
It follows the publication of the British Retail Consortium’s Manifesto Milestones which highlights the threat that the current business rates system poses to business as a whole. It also calls for business rates to flex with the overall economy, which the BPF particularly agrees with.
In its response to the Treasury’s recent Administration of Business Rates consultation, the BPF called for the abolition of the retail price index escalator.
The BPF argued that its use has meant that business rates had been rising at a rate “completely out of sync” with economic conditions. It recommended that business rates should instead be pegged to rental values, as these are a proxy for the overall health of the economy.
In addition, the BPF has warned that the inevitable squeezing of rents eventually harms new investment and development activity in the real estate industry.
Ion Fletcher, director of policy (finance), BPF, said: “Research carried out by the BRC indicates that 80% of MPs find the business rates system to be unfit for purpose, and we urge the government to take heed of this.
“Business rates do not just negatively affect the high street, their impact is widespread, affecting small businesses, and landlords and even pensioners who have invested in commercial property and who are now being crippled by empty rates. Ahead of a General Election, now is the time for government to be committing to a full and comprehensive review of this outdated tax.”
annabel.dixon@estatesgazette.com
