Labour is pledging to replace business rates with a system of “business property taxation”.
Labour has announced the plan as part of its strategy to “reverse the Tories’ 14 years of decline” on Britain’s high streets but details have yet to be revealed.
As well as the business rate changes, the new Plan aims to kick-start high street shopping, including tackling anti-social behaviour and shoplifting, revamping empty retail space and introducing banking hubs to boost person-to-person banking services.
The news coincides with the Liberal Democrats’ own plans to deliver tax reforms to ‘revive struggling high streets’. Announced by leader Ed Davey yesterday, business rates would be replaced with a new commercial landowner levy, with local authorities still able to keep 50% of tax receipts from businesses.
He said the reforms would ‘slash the burden’ on struggling high street shop owners, and ensure landowners ‘pay their fair share’. The new levy would be based on the land value of commercial sites, with the tax increase for landowners phased in over four years.
News of business rate reform has been welcomed by several business leaders including Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA). She said: “The existing unfair system of business rates penalises our community pubs to the tune of £500m a year and a long-term solution to this problem is badly needed.
Allen Simpson, deputy chief executive of UKHospitality, said: “Too often policy makes it expensive to run businesses in the heart of communities. We’re pleased to see this focus on high streets and fixing the broken business rates system.”
Treasury minister Bim Afolami however has hit back at Labour’s plans, saying: “That will mean just like every Labour government before, higher taxes on working families and back to square one.
“The Labour-led Welsh Government is hiking up business rates: it has the highest business rates in Britain, and from April 2024 it slashed business rate relief for the hospitality sector.”