The Treasury Committee held an inquiry into business rates to scrutinise how Government policy has impacted business. The Committee examined how business rates policy has changed, including business rates retention, alternatives to property-based taxes, such as the proposed digital services tax, and how changes to business rates could impact businesses.

Terms of Reference

The inquiry looked at how changes in Government policy have changed the business rates system and how the current business rates system is operating and the associated impact on business.

The inquiry covered the following:

• The impact of changes in business rates policy since 2017 on businesses, in particular:
  • The changes in reliefs and allowances
  • The ability of businesses to pay
  • The relationship between business rates and the behaviours it drives in business.
• How the current business rates system measures up against the following pillars of good tax policy:
  • Fair
  • Support growth and encourage competition
  • Provide certainty
  • Be coherent.
• The economic justification for a property-based business tax:
  • The impact of business rates on rental prices
  • The impact of business rates on property prices
  • Alternatives to property-based business taxes, such as the proposed digital services tax
  • The problems associated with property-based business taxes
  • The impact of changes (proposed and actual) of business rates on local authorities and the high street.