The government has launched a “radical” review of business rates, which could see the UK move away from a property-based tax.
The review will be fiscally neutral but will try to modernise the system, which has been in place since 1990.
One of the central questions it asks is: “What evidence is there in favour of the government considering a move away from property-based business tax towards alternative tax bases?”
The government will also be looking at areas in the EU to see what lessons can be learned.
The findings will be published in time for the 2016 Budget. In the meantime, relief for small businesses will be doubled and discounts for smaller retail premises will be increased.
The review was first announced in the December Autumn Statement and has been labelled a “renouncement” by Labour.
John Cridland, director general of the Confederation of British Industry, said: “The package of measures already announced in the Autumn Statement that will come into force from April will help ease the pressure on hard-pressed retailers.
“But this review provides an opportunity to go much further and we will be making the case for removing the smallest firms from paying business rates completely, linking rates to CPI rather than RPI and introducing more frequent valuations.
“This would go a long way to achieving a more competitive business rates regime that incentivises business investment and supports the high street.”
