'Tax day' provides opportunity to tackle business rates

Business leaders today warned the Chancellor cannot keep “kicking the can down the road ” when it comes to business rates reforms, ahead of the new UK 'tax day '.

The Treasury will unveil a number of new documents and consultations on future tax polices today, with reforms to pension tax relief, inheritance tax and capital gains tax expected to be on the agenda.

Reports also suggest the Government will also discuss plans around an online sales tax.

'Tax day ' is a new date on the financial calendar which is separate from the Budget and the Treasure says will “allow for more transparency and scrutiny ”.

Greater Birmingham Chambers of Commerce warned the Chancellor must ensure businesses aren 't left shouldering greater cost burdens as they look to bounce back from the pandemic.

Raj Kandola (pictured), head of policy at the Chamber said immediate action must also be taken on business rates to help firms survive.

He said: “It 's worth pointing out at the offset that today 's discussions do not carry any fiscal implications - essentially this seems to be another example of Government wanting to test the water before they commit to any longer term change in tax policy.

“Whilst we understand the Chancellor is under pressure to boost the coffers at No.11 after a period of unprecedented spending, we would also urge him to tread carefully to ensure businesses aren 't left shouldering even greater cost burdens as they look to rebound from the crisis.

“Data from our recent Quarterly Business Report revealed that firms an increasingly concerned around models of taxation and in particular, the Chancellor can 't simply keeping kicking the can down the road when it comes to business rates - action needs to be taken right away if firms are to survive this crisis and have a platform to build upon moving forward.

“As we pointed out in our Keep Business Moving report, increasing the frequency of valuations, reviewing the level of the multiplier and removing plant and machinery from the rating system are reforms which are long over due and will go someway to tackling the structural deficiencies at the heart of this outmoded system.

“We would urge Mr Sunak to act now otherwise the prospects of greater business closures and job losses are likely to become even more apparent over the coming months. ”

The Chamber 's call for action on business rates has bene echoed by real estate firm Colliers International, who have set out their own plan for reform.

John Webber, head of business Rates at Colliers, said: “The Government has a real opportunity to take the bull by the horns and introduce some key reforms to the business rates system - a system which in its current form is not working.

“We do not believe in a total abolition. Business rates provide an easy and manageable way to collect tax and, as a physical and property-based tax, one that is difficult to evade. More countries are introducing a property-based tax similar to the business rates system that we have in the UK than are doing away with it.

“But over the past 30 years various governments have over-complicated the system, making it more opaque and increasing the level of this tax disproportionately. As a result, there has been a growing chorus of criticism.

So, while there is a place for a well-managed and transparent business rates system in this country- let 's hope the Government listens to reason and comes to its conclusions and offer solutions quickly. In this period of pandemic, businesses are making their decisions now about whether they stay open or close.

“Increasing costs, of which business rates play a big part will be a significant factor in the decision making.

“We call for a drastic cut in the multiplier and subsequent business rate bills, more regular revaluations, support for the VOA and an overhaul of the appeals system, as well as a quick solution to the MCC debacle. And we urge that this is done sooner than later.

“Leaving discussions until the Autumn could just be too late - and the government may find the golden goose of business rates really has been well and truly cooked. ”

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