FOR IMMEDIATE RELEASE
The Forum gave a cautious welcome to the Chancellor’s announcement in greater devolution of business rates but was more encouraged by the infrastructure commission.
The idea of greater local devolution of business rates is a key element that Forum members have highlighted as the level of taxation on businesses is so high with little in return. 43% of our members would prefer business rates to be abolished and other commercial taxes to be increased although this is highly contentious with 19% strongly against such the suggestion.
A key issue is that tax is not paid by all businesses, with the proportion of businesses paying the rate diminishing as an increasing number of self-employed individuals are working from residential properties – many of whom enjoy commercial advantages over business rate payers. This in effect gives a tax incentive to online retailers and companies who outsource to countries where property taxation is lower.
As Forum Managing Director, Ian Cass pointed out “members want tax simplicity, not a postcode lottery. Business rates remain too high and do not offer good value for money.”
“Previous research from the Forum suggested that 75% of their members were sceptical about the ability of local councils to work with local businesses to make good long-term decisions. This does put greater pressure on councils to provide small firms with value for money on what has now become a local tax at a time when there are considerable pressures on their council budgets.”
In contrast the infrastructure commission will look at more long-term national strategic issues including energy and broadband. The Forum’s membership wants to see local and national infrastructure being simplified and operating more effectively together. Ian mentioned this to the Transport Minister, Patrick McLoughlin over the weekend and was pleased to see this was a view he shared.
“The infrastructure commission and the decentralisation of business rates both have the potential to affect businesses positively, but equally if they do not strike the right balance of simplicity and consistency, they could create more problems than they solve”, warns Ian.
Notes to editors
Representing thousands of small businesses across the UK – including retail, service providers and manufacturing companies – the Forum is recognised by the Government as one of the six main business support and lobby groups. It uses this position to influence decision-makers in the UK and Brussels on the issues that matter to small businesses.
The Forum has undertaken considerable research on business rates, the importance of business location and the infrastructure needs of the UK’s 1.2 million micro, small and medium-sized employers. This can be provided on request.
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