A parliamentary inquiry into the “imbalance” between taxes for bricks-and-mortar stores and online retailers is set to be expanded as criticism of the measures continues.
Communities and Local Government Select Committee chairman Clive Betts plans to use an existing investigation into the effects of business rates on councils to launch a fresh inquiry aimed at scrutinising the disparity between online and offline business taxes.
During the spring Budget, Chancellor Philip Hammond acknowledged the criticism by stating there was scope for reform but failed to lay out any plans to change the current measures.
“There is a fundamental problem in the way valuations for business rates are done and that needs to be looked at,” Betts said.
“High street shops seem to pay more than a similar unit out-of-town.
READ MORE: Business Rates: the Good, the Bad & the Ugly
“That doesn’t feel right when there is a public and political view that high streets need some form of protection.
“There’s also an imbalance between property-based businesses and online sellers.”
This will be the first time business rates has come under scrutiny from a parliamentary inquiry, which have been condemned by some business leaders and prominent retail voices.
Despite these leading retail figures suggesting they be scrapped altogether, Betts argued this would cause more harm than good.
“There was a move led by some retailers to say ‘let’s scrap business rates’. That isn’t going to happen,” he said.
“Business rates are a vital part of council income. If someone pays a bit less, someone else must pay a bit more.”