The Liberal Democrats have published a report calling for the abolition of business rates in favour of a tax on land value. The report sets out proposals for a new “Commercial Landowner Levy”, under which businesses would only be taxed for the land they own and would remove buildings and machinery from the calculations.
The proposal, claims the report, would increase investment and cut taxes for businesses in 9 out of 10 English authorities.
The report recommends that the levy should be paid by owners rather than tenants and that non-residential stamp duty land tax should be scrapped in order to improve the efficiency of the commercial property market. It adds that commercial land should be taxed regardless of whether the buildings above it are occupied or not, and that the tax should also apply to unused and derelict commercial land.
Although the report finds that, initially, the CLL would represent a cut in tax revenue, it claims that it will be revenue-neutral in the long term and argues that redistribution between local authorities would be readjusted to make sure that there is change in local authority funding.
The proposals were endorsed in a vote at the Liberal Democrat Party Conference on 17 September.