The UK Treasury has today rejected calls from retailers who say business rates should be reformed to create a level playing field with online retailers.
During a meeting of parliament’s Treasury Select Committee, chancellor Philip Hammond said reforming international corporation tax was a higher priority for the government, adding that his department had already looked into business rates reform in 2016 and found “no consensus on an alternative base”.
In a letter to committee chair Nicky Morgan, Hammond said: “Respondents agreed that property-based taxes were easy to collect, difficult to avoid, relatively stable compared to other taxes and had a clear link with local authority spending.”
The chancellor’s rejection comes at a time when a growing number of UK high street retailers are asking for reforms in order to be able to compete against online retailers. Retailers pay an average of £8bn per year in business rates and are currently facing a decline in high street footfall and increases in other costs.
A revenue-based tax on online retailers would allow for a 17.5% cut to business rates according to The New West End Company which represents high street retailers in London’s West End. The body’s chair Peter Rogers said the current business rates framework gives online retailers an “unfair advantage” and “a 90% discount” on high street retailers.