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Your characterisation of business rates as a flawed tax (“Britain’s inefficient and unfair property levies need reform”, FT View, August 29) is a view shared by all with a presence on our high streets — and beyond.
Business rates have been with us for centuries but have only recently become discredited.
But any tax will become discredited if it is set so high that it changes behaviour. There has been little recent investment in our high streets and town centres because the cost of the multiplier — the rate at which business is taxed based on a property’s rateable value — has risen to an all-time high of 51 per cent.
We should now focus on reforming business rates, so that revenue is generated without shattering investor and trader confidence at the same time. A programme of reform to broaden the tax base and bring down the headline rate need not lead to large shortfalls in revenue for local authorities.
In the short-term, the chancellor must announce a freeze in the level of the multiplier at the Autumn Statement so that the tax rate doesn’t go even higher than 51 per cent. In the long term, he should announce a plan to progressively reduce its level to 30p in the pound. If we do nothing to bring down rate levels, more retailers will be put out of business. Each bankruptcy depletes the revenue base a little more, while stripping away pride in our towns and high streets.
It is a vicious cycle from which only bold action on the part of government can deliver us.
Vivienne King
Chair, The Shopkeepers’ Campaign
Head of Real Estate Social Impact
The Good Economy
London WC1, UK
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