The Treasury Select Committee, chaired by Nicky Morgan MP, is to examine the impact of recent changes to the rates and if an alternative system, such as a land value-based tax, would help “level the playing field”.
Calls for reform have intensified since 2017, when business rates were reassessed for the first time in seven years to bring them in line with property values, leaving many hospitality operators struggling with huge rises in their bills.
The Jamie Oliver Restaurant Group saw a 28% hike in its rates in 2017, according to analysis from Colliers International, while Byron saw a 40% rise in its bills, and Prezzo 23%. All three restaurant chains shut sites under Company Voluntary Agreements in 2018.
“Many high street businesses are struggling to remain competitive, it has been estimated that 10,000 shops will close this year," says Morgan.
“At the end of the inquiry, we’ll make a series of recommendations to Government on the fairness and effectiveness of the current system, and how it could be improved.”
Trade body UKHospitality says the inquiry has been “a long time coming”.
“The system is now completely out of date, doesn’t reflect the realities of business in the 21st Century and disproportionately cripples hospitality,” says Kate Nicholls, UKHospitality chief executive.
“This is a positive sign that business rates is still very much on Parliament’s agenda, despite the Brexit distraction, and rightly so. Only a complete overhaul of the system – as promised in the Conservative Manifesto – will ensure high street businesses, and hospitality employers in particular, are finally going to be taxed fairly.”
The deadline for submissions to the inquiry is 2 April, have your say here.