Business rates should be scrapped, say business chiefs » SMEInsider

Business rates should be scrapped, say business chiefs

Business leaders came together at a fringe meeting of the Liberal Democrat Conference to call for the “broken, unfit for purpose” system of business rates to be “scrapped in its entirety.”

Hosted by the Guardian, the meeting attracted leading retailers, manufacturers and business organisations including General Motors, Tata Steel and the British Chamber of Commerce – all of whom condemned UK business rates.

Julian Lyon, real estate manager for General Motors in the UK, pointed out that the high cost of business rates could be off-putting to international businesses. “From a global and a European perspective, it is about competitiveness. We pay about eight to 10 times what we pay in Germany,” he said, adding that it could also be difficult to keep track of the expense. “The business rates are a fixed cost that keep going up,” he said.

“It needs total reform,” agreed Mike Cherry, national policy chair for the Federation of Small Businesses. “In our view it is holding back growth and it is stymying further employment.”

For smaller retailers, staggeringly high business rates in some areas can make it impossible to turn a profit, forcing them to operate online and meaning that only the largest chains can afford a place on the high street. Danielle Wilder, commercial director of UK cosmetics retailer Crabtree & Evelyn, said that its Kingston store in the London suburbs spends 23% of turnover on rates alone.

It makes retailing in this country in key towns and cities really difficult to become profitable,” she said.

Although it was pointed out by one delegate that the Liberal Democrats argue for replacing business rates with land tax, many business leaders felt that this, too, could become just as complex and expensive in practice.

Simplicity. Simplifying the process is a must,” said Wilder.

 

  • Alan J

    I completely agree with this call for the scrapping of business rates. I have been driven out of business premises on more than one occasion due to sudden increases in business rates. Business rates are little more than an additional tax on business and make all the difference between a profitable and a non-profitable business-without them many more small businesses would thrive.