Progressive business rates that work for everyone

Progressive business rates that work for everyone

The business rates system needs a rethink, not a sticking plaster

The UK’s legacy business rates system does not reflect digitisation, advancements in technology or changing business models, and a patchwork of reliefs is not going to solve that. Fixing the broken system will help encourage business to invest and grow, whilst supporting sustainable public finances.

The change we're calling for

We’re calling on the government to recognise the issue and take clear steps towards fundamental reforms to business rates – creating a fair and progressive system that works for every business.

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    A rethink of the business rates system that delivers the certainty business needs to invest and grow

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    A grace period that enables business to recoup investment costs before their rates rise in-line with the new value of the property

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    More frequent business rate revaluations to avoid sharp changes in costs to business

Why it's needed

If you are a UK business, then the current business rates system likely poses many challenges:

• It represents a growing financial burden for businesses large and small, as part of an increasingly complex network of taxation
• It makes it tough for organisations to plan effectively due to sharp changes in cost every 5 years (to be 3 years from 2022 onwards) when revaluated
• It stifles investment in the facilities and innovations needed for sustainable growth, whether solar panels, fibreoptic cable, machinery, factories or production lines
• It exacerbates regional inequality because struggling local authorities tend to have higher social costs but can’t charge as much for space.

Put simply, a legacy tax cannot support a modern, growing economy, which is why we’re calling on the government to commit to a fundamental shift in its approach to business taxation.

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"Reforming the business rates system is vital for our local economies and for growth that is spread fairly across the UK. The right system would allow business to invest in the factories and offices where we work, and the shops, restaurants, hotels and local amenities that support the communities we live in."

Annie Gascoyne, Head of Economic Policy, CBI

The case for new rates

Essential funding of our public services

Though a vital source of funding, business rates pose significant challenges to firms. Evidence suggests the rates can make it tough to invest for growth, to plan for the future and to turn a profit.

  • 14 pence in every pound of tax paid by business is in business rates – that’s the third biggest tax paid by business

  • The burden of property tax in the UK is higher than any other G7 country. In 2016, property taxation as a % of GDP in the UK was 47% higher than the average across the G7 countries.

  • Revaluations can lead to sharp changes in business rates that make it hard to plan for the future – most recently the London Borough of Hackney saw average rateable values rise to 46%.

Our progress and impact

The CBI campaigns tirelessly on behalf of our members so that business creates prosperity for all. Learn more about the work we do and the impact we are making on this issue.

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Support the change

  1. Are you a business leader?

    Join the CBI

    Our members are our mandate, and the reason we’re the most influential business organisation in the UK. Join the voice of business and help us campaign to keep progressive business rates a priority on the government agenda.

    Find out more
  2. Are you a CBI member?

    Have your say

    Shape the CBI's work on taxation policy and get insight on the latest developments from government by joining a CBI Working Group.

    Get involved
  3. Are you a policymaker?

    Make a difference

    This campaign is led by the CBI's Tax and Regulation team.

    Contact Annie Gascoyne, Director of Economic Policy, to find out why UK business urgently needs a progressive business rates system and how you can support it.

    Contact us