Government urged to act on rate review after dismissing MPs’ concerns

In October the Treasury Select Committee called on the government to consult on alternatives to what the MPs described as a “broken” system.

In its response to the committee’s report, the government said it disagreed and highlighted the support provided to small retailers through Small Business Rate Relief.

The government said it was “committed to delivering a tax regime that makes the UK an attractive destination to set up and grow a business” and that “options for reform should be undertaken in a considered, evidence-based manner – considering significant changes to the business rates system as part of conducting a fundamental review”.

Issues raised by the Treasury Select Committee include:

• The current approach to business rates acts as an immediate significant disincentive to investment
• The government should look at where case law currently stands on what assets are included in rateable values and should consider whether legislation is required to ensure the categories are fit for the modern economy
• It is unacceptable that there are still appeals outstanding from the 2010 listing, years after the appeals were first raised.

Association of Convenience Stores chief executive James Lowman called on the government to get on with its fundamental review of rates.

“The Treasury Select Committee inquiry raised a lot of valid points about business rates not being fit for purpose, so if the government is going to defer to the long-awaited fundamental review then that needs to get started as soon as possible,” he said.

“While we wait for this fundamental review, appeals still aren’t being dealt with, retailers are putting off investment plans, some businesses are paying business rates bills that are flagrantly unfair, and consumers are seeing their high streets suffer.”

The Conservative government committed to a fundamental review of business rates in its General Election manifesto.