F Hinds joins battle to overhaul business rates

F-Hinds-business-rates-image.jpg

More than 100 companies pen open letter published in Telegraph.

More than 100 companies, including jeweller F Hinds, signed an open letter requesting the overhaul of business rates, which was published in The Daily Telegraph newspaper yesterday (September 16 2014).

Businesses including Tesco, Argos, Marks & Spencer and Boots signed the letter to draw attention to the “critical problem” of business rates, stating they are “no longer fit for purpose in the 21st century” and must be revamped in order to “unleash investment”.

The signatories of the letter are primarily retailers, but it has also been backed by bookmakers, manufacturers, coffee shops and gyms.

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Business rates bring in roughly £25 billion for the Treasury every year, but businesses claim the tax has grown out of kilter with economic realities and is hindering investment.

George Osborne has committed to a review of the tax by 2017, but critics are concerned that this will only lead to insufficient change. In the letter, the businesses, which also include Asda, Whitbread, Ladbrokes and Heineken, say: “Business rates are higher than property taxes anywhere else in Europe and are the second highest in the OECD. This is a critical problem for all of British business.”

The letter calls for all political parties to commit to a “fundamental reform” of the tax in their manifestos for the General Election next year. It adds: “A modern, sustainable and transparent system would unleash investment that could bring skilled and entry level jobs and new and expanded businesses into our local communities. Those who seek a competitive tax regime as a draw for investment and jobs should apply that logic to business rates.

“It is no longer an option to say that reform is too difficult or complicated and we call on all political parties to commit to fundamental reform in their manifestos for the next General Election.”

British Retail Consortium director-general Helen Dickinson said the breadth of industries represented in the letter “shows the strength of our collective belief that the existing system is no longer fit for purpose”.

She said: “Today’s open letter proposes that the political parties should make a commitment to look at deeper reform of business rates if they form the next government after the election.” Business rates are calculated through a valuation of Britain’s property and the annual rate of inflation. The revaluation of property is scheduled to take place every five years, but the Government postponed the valuation that was due to take place in 2013 and enforced in 2015, claiming that it would cause uncertainty for businesses.

"This prompted an outcry from businesses that have been left facing a rates bill based on property values in 2008, the peak of the market. This has lead to businesses appealing their rates bill in an attempt to move it in line with present values.”

The Department of Communities and Local Government (DCLG) has estimated it will repay £4.2bn between 2010 and 2015 from appeals, including interest charges, which is being treated as evidence of a flawed system.

The letter

As the Daily Telegraph has consistently pointed out, the current system of business rates is no longer fit for purpose for the 21st Century. Business rates are higher than property taxes anywhere else in Europe and are the second highest in the OECD. This is a critical problem for all of British business. A recent survey demonstrated that 93% of MPs agree that the fundamental reform of business rates would revitalise our high streets and town centres. Manufacturers, retailers, the hospitality trade, property, service industries and businesses large and small are all held back by business rates.

A modern, sustainable and transparent system would unleash investment that could bring skilled and entry level jobs and new and expanded businesses into our local communities. Those who seek a competitive tax regime as a draw for investment and jobs should apply that logic to business rates. It is no longer an option to say that reform is too difficult or complicated and we call on all political parties to commit to fundamental reform in their manifestos for the next General Election.

 

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