Business Rates

Part of Delegated Legislation – in the House of Commons at 4:46 pm on 2nd April 2019.

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Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, The Cotswolds 4:46 pm, 2nd April 2019

My hon. Friend makes a very good point, and I am sure it has been heard by the Minister. I am being urged to hurry up as I have taken an awfully long time, so I will not take too many more interventions.

The rates on Amazon’s nine distribution centres have fallen by an average of 1.3% and ASOS has seen its bill fall by 0.8% because, although Amazon owns 20 million square feet of warehousing from which to supply customers, it does not have to occupy premium premises on the high street to get the footfall that a high street retailer needs. This provides those large businesses with an automatic advantage, making it easier for them to slash prices while maintaining a profitable margin. I have already demonstrated how they pay much lower business rates per square foot.

Although the Government have introduced a diverted profits tax and a new digital services tax, which will raise £400 million, I do not believe some of these very large digital platforms are actually paying the just amount of tax on their turnover in this country that a British business would pay.

I have previously mentioned that the British Independent Retailers Association has long advocated changing the current threshold or discretionary relief to an allowance—the difference being one is discretionary and an allowance is automatic—which would cut red tape for both local and national Government. It could be applied at source, as opposed to being dependent on the local council, reducing the need for the £3.7 billion spend on mandatory and discretionary allowances and reducing the Government’s current compliance cost for processing small business rate relief claims. I have already explained the difficulties with different councils applying different criteria.

Paradoxically, unknown to me at the time of my debate on 8 October 2018, the Minister had answered my written question, 176219, the day before, in which he said:

“The Government is committed to considering the feasibility of replacing small business rate relief with a business rates allowance”.

So the Government had actually conceded the point for small businesses, once the local authority and HMRC systems are linked in line with our planned digitisation of business rates. I would be grateful if my right hon. Friend the Financial Secretary updated the House on where we have got on the matter.