THE BOSS of a Worcester accountancy firm has called on Chancellor Philip Hammond to scrap business rates in his budget to be revealed next week.
Matthew Lee, managing partner of Bishop Fleming, believes the ‘archaic’ system should be replaced by a corporation tax-style system so businesses are taxed on the profits they make, rather than on property values.
From April 1, a third of businesses in the UK are expecting sharp rate increases after the Government carried out a major revaluation of property rental prices.
As a result, Chancellor Philip Hammond, who will reveal his budget to the House of Commons next Wednesday (March 8), has faced pressure from backbench Conservative MPs, who are concerned about the impact the rate rises could have on small and medium sized businesses in their constituencies.
The Government has since confirmed they are looking at ‘appropriate relief’ for firms hardest hit by business rate rises.
Mr Lee said: “The furore over business rates could have been avoided if the Government had delayed its property revaluation exercise, whilst it undertook a full review of the system.
“What about retailers that have more than one shop? The rateable values of all the shops have to be added together, pushing a trader above the threshold for relief.
“A tax should be fair, certain, convenient and efficient, but business rates fail on all four counts.
“They are not based on an ability to pay, are instead based on infrequent and arbitrary valuations of property, they discourage investment and innovation, and there is currently a backlog of more than 300,000 business rate appeals.”
