Lib Dems call to scrap "badly designed" business rates

By Sophie Witts contact

- Last updated on GMT

Liberal Democrats restaurant business rates

Related tags: Business rates, Liberal democrats, Legislation, Property

UKHospitality has praised proposals by the Liberal Democrats to scrap business rates.

In a report, “Taxing Land, Not Investment”​, the party calls for the tax to be replaced by a Commercial Landowner Levy based on the value of the land rather than property.

The levy would be paid by owners rather than tenants, which the report claims would mean lower taxes for businesses in 92% of English local authorities.

But Kate Nicholls, chief executive of UKHospitality, says more urgent action is needed to stop more restaurants closing their doors.

“Despite Government commitments to a fundamental review of business rates, we are still stuck with an out-of-date system that unfairly hits hospitality businesses,” says Nicholls.

“The Lib Dems’ recognition that we need radical reform on rates and a complete overhaul of the system is positive for hospitality businesses. A move away from a property tax is positive, although any future system must also incorporate a tax on digital businesses to ensure they pay their fair share.

“We need action immediately, however, or hospitality businesses will continue to struggle against unfair taxes and there will only be further closures.”

In April 2017 business rates were reassessed for the first time in seven years to align them more closely with current property values, leaving many restaurant operators facing huge hikes in their bills.

Analysis from Colliers International estimated​ the Jamie Oliver Restaurant Group saw a 28% rise in its bills in 2017, while Byron’s rose 40% and Prezzo’s costs increased 23%.

Announcing the plans, Lib Dem leader Vince Cable says: “Business rates were a badly designed policy to begin with and have become an unacceptable drag on our economy.

"They are a tax on productive investment at a time of chronically weak productivity growth, and a burden on high streets struggling to adapt to the rise of online retail.”

Related topics: Legislation

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