Liz Truss and Rishi Sunak urged to address business rates reform
Business leaders including New West End Company CEO Jace Tyrrell, and Heart of London Business Alliance CEO Ros Morgan, have written to Conservative leadership contestants Liz Truss and Rishi Sunak calling for the “fundamental reform of business rates”.
The letter urges the new Prime Minister to “deliver changes that real businesses want to see”, in order to deliver growth and investment in communities to make the economy work for individuals and businesses, at a time when the cost of living crisis means rising prices for everyone.
The business leaders say that the commitment to change “has been overlooked by successive Governments”, but changes can “protect employment, reduce inflation and promote growth”.
The letter reads: “Business rates have no connection to profit and are a regressive form of taxation, which tax businesses for existing rather than taking a proportionate amount of their income”.
It also says that while energy prices are influenced by international factors, the current excessively high level of business rates is “entirely in the control of the Government” and is being directly fed through to individuals doing their weekly shop.
According to the letter, research from the FSB shows that more than 440,000 small firms could go out of business because of late payments, which it calls “a direct attack on growth in this country”.
The issue of reviving VAT-free shopping for international tourists is also raised once again, as it could give “a huge competitive boost” and drive the creation of more local jobs.
Non-EU visitors spent £17.8bn in 2019, of which £3bn was on tax-free shopping and the remaining £14.8bn on hotels, restaurants, travel, culture and entertainment, raising around £3bn in VAT.
The letter, which is also signed by Chancellor Adam Hug, Leader of Westminster City Council, says that Britain is now the only European country not to offer tax-free shopping to non-EU visitors, “putting us at a competitive disadvantage, particularly with France and Italy”.
The letter closes with: “We hope you will commit to tackling the challenges we have set out to support businesses, alongside more substantial measures to support individuals, as we all seek to navigate the current cost of living crisis.”