MPs pledge to widen business rates review remit

MPs looking into business rates have said there is a “fundamental problem” with the system, and pledged to further their investigation.

The move comes as the ongoing row over business rates and extortionate revaluations rumbles on.

Retailers continue to receive rates rises, while research shows that internet companies will actually save money following the first revaluation of business rates since 2010.

Calls for a “level playing field” are growing and now the Communities and Local Government Select Committee is widening its inquiry with a view to better spreading the cost to retailers.

The committee’s chairman Clive Betts, Labour MP for Sheffield South East, said: “There is a fundamental problem in the way valuations for business rates are done and that needs to be looked at.

“High street shops seem to pay more than a similar unit out-of-town. That doesn’t feel right when there is a public and political view that high streets need some form of protection. There’s also an imbalance between property-based businesses and online sellers.”

Business rates expert Paul Turner-Mitchell said: “I don’t think the Government will rake in any more money, it’s about a more even distribution of business rates across the retail sector.

“The likes of Shop Direct, ASOS and Amazon with big distribution centres don’t pay as much as small retailers. There’s a lot of anger and we have a tax system that was devised when there wasn’t a digital economy. It’s a question of making sure the burden is shared more fairly and giving community and small shops a more level playing field.”

Mark Rigby of business rates specialist CVS added: “Fairness must be at the heart of that inquiry so local communities can thrive going forward.”

CVS analysis suggested that Amazon’s nine distribution centres in England and Wales would save £148,000 under the rating system.