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Cameron Pledges Radical Business Rates Reform

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Telegraph 29/1/14

'The tax on commercial property in the UK could be scrapped after David Cameron paved the way for an overhaul of business rates and retailers called for “fundamental reform”. A £415m package of business rates cuts and infrastructure investment designed to boost high streets and local economies will be unveiled on Wednesday by Eric Pickles, the Communities Secretary.

The package includes a £1,000 business rates discount for 300,000 small retailers, which was initially outlined in the Autumn Statement.

However, retailers are pushing the Government for a wider reform of business rates to ease the pressure on the high street and companies.

Business rates have existed in various forms since the Tudors ran the country, but the Coalition is planning to release a discussion paper on the future of the tax in the Spring.

The Prime Minister has opened the door to radical changes in the tax after acknowledging an imbalance between high street and online retailers.

“I think we do need to look at longer term reform,” Mr Cameron said at the Federation of Small Businesses conference.

“It is not going to be easy because rates raise about £24bn and I don’t think there is any one solution that is going to make everybody happy.

“But I think we’ve got to start addressing this issue, particularly this issue about internet retailing and high-street retailing.”

Retail sources suggested that moving away from a tax on commercial property to a modern alternative – such as a sales tax – is an option being considered.

The British Retail Consortium has hired leading accountancy firm EY to draw up alternatives to business rates and is due to present its findings to George Osborne next month. Mr Osborne has said the Government wil look to reform business rates at the next revaluation of Britain's property in 2017.

One retail source said that it did not want the Government to simply introduce an online sales tax.

“Taxing by property is no longer fit for purpose. But why on earth should we punish someone who has started a profitable online business?” they said.

Helen Dickinson, director-general of the BRC, said: “The Prime Minister is right to recognise the urgent need for business rates reform. The Government has promised a discussion document on changing the system in the spring and we are keen to see that published as soon as possible, so that we can engage constructively with this vital work.

“Whether retailers operate online, through physical shops, or through multiple channels, the current system is outdated and disincentivises businesses from investing in property. Our members are clear that a fundamental change to the system will unlock new investment and jobs across the UK.”'

Are they helping small retailers or banks/landlords sat on empty property?

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Telegraph 29/1/14

'The tax on commercial property in the UK could be scrapped after David Cameron paved the way for an overhaul of business rates and retailers called for “fundamental reform”. A £415m package of business rates cuts and infrastructure investment designed to boost high streets and local economies will be unveiled on Wednesday by Eric Pickles, the Communities Secretary.

The package includes a £1,000 business rates discount for 300,000 small retailers, which was initially outlined in the Autumn Statement.

However, retailers are pushing the Government for a wider reform of business rates to ease the pressure on the high street and companies.

Business rates have existed in various forms since the Tudors ran the country, but the Coalition is planning to release a discussion paper on the future of the tax in the Spring.

The Prime Minister has opened the door to radical changes in the tax after acknowledging an imbalance between high street and online retailers.

“I think we do need to look at longer term reform,” Mr Cameron said at the Federation of Small Businesses conference.

“It is not going to be easy because rates raise about £24bn and I don’t think there is any one solution that is going to make everybody happy.

“But I think we’ve got to start addressing this issue, particularly this issue about internet retailing and high-street retailing.”

Retail sources suggested that moving away from a tax on commercial property to a modern alternative – such as a sales tax – is an option being considered.

The British Retail Consortium has hired leading accountancy firm EY to draw up alternatives to business rates and is due to present its findings to George Osborne next month. Mr Osborne has said the Government wil look to reform business rates at the next revaluation of Britain's property in 2017.

One retail source said that it did not want the Government to simply introduce an online sales tax.

“Taxing by property is no longer fit for purpose. But why on earth should we punish someone who has started a profitable online business?” they said.

Helen Dickinson, director-general of the BRC, said: “The Prime Minister is right to recognise the urgent need for business rates reform. The Government has promised a discussion document on changing the system in the spring and we are keen to see that published as soon as possible, so that we can engage constructively with this vital work.

“Whether retailers operate online, through physical shops, or through multiple channels, the current system is outdated and disincentivises businesses from investing in property. Our members are clear that a fundamental change to the system will unlock new investment and jobs across the UK.”'

Are they helping small retailers or banks/landlords sat on empty property?

Helping banks and landlords. Moving the tax from business rates to a sales tax will just mean people spend less in these shops, diminishing demand for these small business' so what's the point?

Commercial rents are the elephant in the room, yet they make no mention of it. But what else do you expect from the party of inherited wealth and landllordism.

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So they are going to get rid of one tax to replace it with a other.

Well, yes, which we will all pay instead of just the shops.

I have what in the long term would be a better economic proposition(though short term would, ahem, create a few issues).

They need to find 24bn if they abolish the tax - simply stop paying housing benefit.

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Ideally they should just leave it alone and let the value of commercial property deflate. The property can then be put to better use [flats for the over 65's] than selling second hand crap, scratch cards and plastic tat from China.

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No.

If I buy a laptop in America the shop tells me the price is x, then they add y tax at the till, I pay x+y to the shop and the shop sends y to the government, and that's a sales tax.

If I buy a laptop in the UK the shop tells me the price is x+y, I pay x+y to the shop (though the receipt tells me how much x and y were separately), and the shop sends y to the government, and that's not a sales tax?

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lol - I can't believe how long I've been going on about getting rid of corporation tax in its entirety and replacing with a sales tax. About 1% would do.

That's right, 1%. Just like income tax was when it was first introduced. Please stop giving them ideas.

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The package includes a £1,000 business rates discount for 300,000 small retailers, which was initially outlined in the Autumn Statement.

Wonder how much of that 'discount' is effectively just uncollectable arrears with added government spin.

This seems like there's a tiny sliver of opportunity to do something radical that yields positive results and near infinite opportunity to knee-jerk meddle a disastrous mess.

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How about an out-of-town shopping centre tax?

Or a large multinational company tax evasion tax?!

Wales has one band of business rates; England has two, but Scotland has three, and is aimed at large out-of-town retail sheds.

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