BRC proposes business rates system based on energy usage

The British Retail Consortium (BRC) has proposed replacing the current business rates system with a tax based on energy rather than property.

The BRC has published a range of ideas to reform the system in order to support the regeneration of the high street and create more retail jobs.

In addition to taxing retailers on energy usage, it proposes a rates discount that rewards employment.

BRC director general Helen Dickinson said: “We have a once in a generation chance to fundamentally change the business rates system and the time is right to think creatively and in the best long term economic interests of the UK.

“These potential options would be good for the public, the economy and businesses small and large, while still providing significant tax revenues for the government. We now intend to analyse each one in more detail and very much hope that we will stimulate discussion that goes beyond tinkering with the existing system.”

Other proposals, which were devised by BRC members and Ernst&Young, include providing a discount to business rates based on a percentage of corporation tax payment, capped at an overall proportion of a company’s rates bill.

The Association of Convenience Store has also called for a reform of the current business rates system.

ACS public affairs director Shane Brennan said: “We agree that the current approach to rating is unsustainable and needs reform - we welcome the BRC open approach to taking forward the debate. We will consider these options carefully to understand how they would deliver fairness for small retailers. 

“In the short term we are focused on promoting greater use of rate relief powers by local authorities to reduce the immediate cost pressures facing local shops up and down the country. The Treasury’s decision to find rates discounts is a significant help in this regard.”