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Business rates review must create ‘fair’ system, says CB

Posted by Wellden User

The government’s ongoing business rate review must aim to create a ‘simple, fair and competitive system’, the Confederation of British Industry (CBI) has said.

The business organisation argued that the current system limits investment and impedes competition. It said a new system should be refocused onto promoting investment-led growth.

The CBI is calling for:

  • More frequent property valuations
    This will create a fairer system capable of reacting quickly to the changing economic environment. The CBI suggests introducing a 3-year evaluation period.
  • Raising rates in line with the consumer price index (CPI) instead of the retail price index
    This will ensure that business rates do not rise faster than the official CPI inflation rate. According to the CBI, the change would save ratepayers £1.5bn.
  • Exempting properties with a rateable value under £12,000 from paying business rates
    This will remove the cost of business rates for many small businesses. The CBI also argues that this would also enable efficiency savings which could be reinvested into improving the system.

Katja Hall, deputy director general of the CBI, said:

“The current business rates system harms businesses by relying on a decades-old model that no longer reflects economic conditions. That’s made life tough for retailers in particular.

“These reforms are long overdue so it’s good that the government is following through on its commitment to look closely at how it can help alleviate the most onerous aspects of business rates.”

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Directors call for fiscal discipline

Posted by Wellden User

The majority of company directors want the government to press ahead and achieve a budget surplus by the end of the parliament, an Institute of Directors (IoD) member survey has found.

Members of the IoD have listed their top priorities for the new government, which include a reduction of the deficit, increased spending on infrastructure and the lowering of taxes for businesses and individuals.

A majority of 85% support the government’s goal of eliminating the budget deficit by 2020. 12% of respondents want to achieve this entirely through spending cuts while just 1% said tax rises should be the only means of getting the deficit down. A fifth thought an equal mixture of spending and tax rises would be the preferable way of achieving a surplus.

Of the 1,211 IoD members surveyed:

  • more than half opposed a rise in national insurance, income tax and business rates
  • 56% want the government to invest in the country’s broadband infrastructure
  • 55% said there should be more investment in energy generation
  • many want the government to spend more on developing transport infrastructure: railways (50%), roads (44%) and airports (34%)
  • 89% support a crackdown on tax avoidance.

Simon Walker, director general of the IoD, called on the government to stick to its pre-election plans to reduce spending:

“Returning the budget to surplus must be the overriding goal in this parliament, but businesses want the emphasis to be on finding further reductions in spending, not significantly raising taxes.

“If we do not even begin to deal with the pile of debt, the situation will only be more dangerous if we encounter another economic shock.”

Walker also urged the government to implement “much more fundamental [tax] reforms”:

“A hugely complex tax code also remains a barrier to growth for many businesses.

“Businesses want national insurance brought down, business rates reformed and a tax code which encourages investment and entrepreneurialism. This will not be achieved by tinkering at the edges.”

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