MPs call for business rates reforms to save the high street

MPs have urged the government to consider an online sales tax as part of a package to save the UK’s struggling high street.

A report published on Thursday by the Housing, Communities and Local Government Committee urged the governmentto put more money into local authorities, and said that rules allowing developers to knock down offices to make way for flats without proper permission should be scrapped.

High streets to become 'ghost towns' if nothing is done

The report, led by MP Clive Betts, said that “business rates are stacking the odds against high street retailers,” and that “more fundamental changes to the business rates system, to business taxation and to planning are required” in order to ensure the survival of the ailing high street.

The report continued: "Some formerly thriving shopping areas are likely to become ghost towns and effectively close down altogether unless the government, councils, retailers, landlords and the local community act together."

The committee also said that high street retailers were currently paying much higher business rates than online retailers. Amazon UK’s rates, for example, are about 0.7 percent of its UK turnover, while brick-and-mortar stores pay between 1.5 percent and 6.5 percent.

'Tax reforms are needed to level the playing field'

“It is likely that the heyday of the high street primarily as a retail hub is at an end. However, this need not be its death knell,” Clive Betts commented in the report. “Local authorities must get to grips with the fact that their town centres need to change; they need to innovate, setting out a long-term strategy for renewal, reconfiguring the town centre and finding new ways of using buildings and encouraging new independent retailers."

Betts continued: “Dated planning policy must be reformed to reflect the needs of modern high streets and town centres. Business rates must be made fair. They are currently stacking the odds against businesses with a high street presence and this must end. Tax reforms are needed to level the playing field between online and high street retailers, and we urge the Government to investigate all the options in this area, including an Online Sales Tax.”

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