'Cut business rates to help us cope with Brexit': Groups send urgent plea to Chancellor from 100,000 UK firms

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Top groups representing more than 100,000 firms have written to Chancellor George Osborne to demand an urgent cut in business rates coupled with action to help companies cope with the Brexit fallout.

Those issuing the demands include the British Chambers of Commerce, the Federation of Small Businesses, the British Retail Consortium, the Association of Convenience Stores and the Association of Licensed Multiple Retailers. They represent a range of businesses from FTSE retailers to corner shops.

Companies are offering to ringfence the money they save from any reduction in business rates and then to reinvest it in their firms.

Slashing tax: The Chancellor has already shown a willingness to act to mitigate the effects of Brexit by announcing last week an intention to cut corporation tax to less than 15 per cent

They want the date for the introduction of planned reforms to the rates system – due in 2020 – to be brought forward. 

The companies also want many firms to be relieved of the obligation to pay business rates altogether and they are calling for the whole system to be simplified.

The Chancellor has already shown a willingness to act to mitigate the effects of Brexit by announcing last week an intention to cut corporation tax to less than 15 per cent.

James Lowman, chief executive of the Association of Convenience Stores, told The Mail on Sunday: 'Brexit and the Chancellor's announcement last week have reopened the debate about business taxes.

'If we are going to do that then we need to recognise that business rates are a much bigger burden – especially for small businesses.

'Business rates are the thing that weighs on the operating model of business and more directly affects whether they can invest.'

Instant: The British Chambers of Commerce are among the top groups issuing demanding an urgent cut in business rates coupled with action to help companies cope with the Brexit fallout

The £27billion business rates tax system, which is based on property, not on profit, has been lambasted by firms and trade groups since the banking crisis.

Osborne reviewed the system in March, but for some businesses it still represents their single highest cost by far.

Mike Spicer, director of research and economics at the BCC, said: 'A lot of businesses feel their change in circumstances in recent years has not been reflected in their rates bills. Business rates are too costly and too complex.

'There is a lot of frustration that the valuation of business rates was delayed in the aftermath of the financial crisis, which means many areas outside London saw big rises in rates even as their property values and rents fell.'

The business rates tax system, which is based on property, not on profit, has been lambasted by firms

Spicer said the system discourages reinvestment into property because improvements force up values and prompt further hikes in business rates.

He suggested reducing the scope of the tax to the size and position of the plot rather than including fittings or equipment.

Paul Turner-Mitchell, a business rates campaigner, said: 'Corporation tax is a tax on profit. Many struggling businesses would love to be in a situation where they could pay more corporation tax, but are just trying to keep their head above water.'

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