Chancellor George Osborne should use his Autumn Statement to reform business rates, according to a Blackpool tax adviser.
Tony Medcalf tax partner at Moore and Smalley chartered accountants and business advisers, believes reforming the ‘punitive’ tax to would encourage business growth and create new jobs to boost the economy.
He said local authorities should be given greater freedom from central Government to devise a more flexible system of rating that focuses on promoting enterprise.
Business secretary Vince Cable hinted in October that business rates may be addressed in the chancellor’s final Autumn Statement of this parliament on December 3.
Mr Medcalf said: “Business rates are a real constraint for those businesses that are considering a move to larger premises and I’m aware of businesses that have actually downsized to save on business rates.
“Of course, business rates are an essential element in funding local government services. However, over recent years I have seen more small businesses put under significant financial pressure from escalating rates. This must be putting a brake on the economic recovery.
“Business rates have become merely a tax collection exercise where it’s hard to see what businesses get back in return. I would like to see an overhaul of the system so each authority is required to devise a system of rating which is mindful of business needs and has the promotion of enterprise as a key component. The system also needs to be flexible so it can react to changing fortunes in the local economy.”
He said he would also like to see action taken to lower employment costs for businesses to encourage job creation.
He said: “Employment costs are going up substantially with the advent of auto-enrolment pensions.”