Tory MP calls for business rates to be scrapped

A Conservative MP has called for the current business rate system to be scrapped in order to create a ‘level playing field’ between online and high street retailers.

Thirsk and Malton MP Kevin Hollinrake introduced a Ten-Minute Rule Bill earlier this week in the House of Commons, which would replace the current system with a 3p increase in VAT.

According to Mr Hollinrake, the move could ‘help save hundreds of thousands of businesses and jobs impacted by the slump in sales because of the health crisis’.

‘Business rates were designed for a bygone era when business went hand in hand with high street premises but the way we shop is now changing for ever,’ said the MP.

‘Since the pandemic and because we have spent long periods in lockdown online sales now account for 33% of all retail sales compared to 20% only a year ago.

‘In my view, the best option would be to completely scrap business rates and apply a small increase in the sales tax that already exists in the shape of VAT,’ he added.

‘This would immediately level the playing field, would not create any additional bureaucracy and we would be able to completely dispense with the convoluted business rates system including revaluations, check, challenge, appeal, annual bills and debt collection. It would also liberate thousands of talented, intelligent hard-working people in the Valuation Office Agency and survey practices to find new career opportunities that would drive forward the UK economy.

‘I would estimate that an increase in VAT from 20p to 23p would fill the £30bn per annum gap created from business rates abolition whilst levelling the playing field between online and high street businesses,’ he added.

In October 2019, a report by the Treasury select committee warned the current business rates system places a greater cost on high street shops than it does on online retailers.

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