The Labour party plans to scrap business rates and hike the rate of the new digital services tax to build a level playing field between high street shops and online stores, Shadow Chancellor Rachel Reeves told delegates at the Labour conference on 27 September 2021.

Referring to a recent study by the British Retail Consortium that found four out of five retailers face closure without a reduction in business rates, Reeves called on the Government to freeze the tax for next year.

It should also give all SMEs a business rate discount next year and increase the threshold at which businesses would qualify for business rates relief, she said, adding:

"To pay for those measures, the Government should increase the digital services tax (from 2%) to 12%."

The Government is currently analysing answers it received from a call for evidence as part of its business rates review, which is due to be published in autumn 2021.

During the pandemic, business rates were frozen between 1 April 2020 and 30 June 2021 and are currently charged at 33% of what they usually would be until 31 March 2022, after which point the tax on non-domestic properties will revert to pre-pandemic rates.

Mike Cherry, national chair of the Federation of Small Businesses, said:

"The Shadow Chancellor is right to propose concrete reform of a business rates tax which disproportionately burdens the small businesses and sole traders at the heart of local communities."

Talk to us about business tax.

Subscribe To Our Newsletter

By submitting your details you agree to receive email marketing from EV Accountants and have read and understood our Privacy Notice. You can withdraw your consent or change your preferences at any time by emailing us or by clicking the link at the bottom of every email we send you.

You have Successfully Subscribed!