The British Chambers of Commerce is calling for an urgent overhaul of the business rates system this week in light of news that the Government took in £22.9bn in business rates in 2014-15.
Dr Adam Marshall, BCC executive director for policy and external affairs, said: "Today's announcement that the Treasury has taken in £22.9 billion in business rates in the past year is a timely reminder of this hidden burden that companies face.
"The business rates system is outdated, unfair and poorly designed, which is why we have long called for fundamental reforms. Business rates are a tax that British companies face before they have made a single penny of revenue."
The Government is currently conducting a wide-scale review of the UK business rates system. In response to the latest phase of this review, the BCC has called on the Government to deliver "fundamental reforms". It says the business rates system "stops companies investing and weighs down growth across the nations of the UK".
The BCC is calling for the following reforms:
- A new and simplified system, to include annual revaluations to stop shock bills hitting firms;
- The removal of plant and machinery from the ratings system encouraging companies to invest;
- The abolition of the annual uplift in multiplier to stop arbitrary rises in bills between revaluations;
- Reliefs to be based on the size of a business, not the size of its premises.
The BCC is also lobbying for a system that reduces the administrative burden of the valuation process for businesses and takes into account local economic conditions.
Dr Marshall said: "The present system discourages investment in property improvement, plant and machinery. It places an unnecessarily large financial burden on businesses at a time when we should be encouraging them to invest and lay the foundations for future growth. Reforming business rates would empower companies to invest in growth and jobs, thereby ensuring long-term rewards for the economy as a whole."