Chancellor Rachel Reeves has described the UK economy as feeling "stuck" while announcing Treasury plans to reform business rates. The review will focus on removing "cliff edges" that discourage small business expansion.
The Treasury is examining changes to business rates - the tax levied on UK business properties - as part of broader efforts to reduce red tape and boost economic growth. An initial report identified problems with current small business rates relief rules that "can discourage" expansion and investment.
Current system creates barriers
Under existing rules, companies lose access to all small business rates relief when they open a second property, unless they meet specific criteria. This creates a significant barrier for growing businesses looking to expand their operations.
The review forms part of the Government's wider commitment to overhaul business rates amid mounting pressure from firms and business groups. Major high street retailers have been calling for wholesale reform of the current system.
High street leaders push for change
Bosses from major retailers including John Lewis met with Chancellor Reeves last week to advocate for changes to business rates rules. The discussions highlighted industry concerns about the current tax burden on physical retail premises.
Reeves said: "Our economy isn't broken, but it does feel stuck. That's why growth is our number one mission. Tax reforms such as tackling cliff-edges in business rates and making reliefs fairer are vital to driving growth. We want to help small businesses expand to new premises and building an economy that works for, and rewards working people."
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
