Shadow chancellor Rachel Reeves confirmed a future Labour government would scrap business rates in a potential shakeup being described as “the biggest overhaul of business taxation in a generation”.

In her address at the Labour conference in Brighton today, she acknowledged the “struggling” high streets, as a result of the coronavirus pandemic, and stressed how most firms will be facing a “cliff-edge” in March when a 66% relief on business rates is set to end.

“Our high street businesses do so much to enrich our lives and our communities, facing huge adversity in the past year,” said Reeves. “They are struggling right now, with a cliff-edge in rates relief coming up in March. The next Labour government will scrap business rates.

“We will carry out the biggest overhaul of business taxation in a generation, so our businesses can lead the pack, not watch opportunities go elsewhere.”

She added: “And here is our guarantee: the system we replace it with will incentivise investment, feature more frequent revaluations, and instant reductions in bills where property values fall, reward businesses that move into empty premises, encourage, not penalise, green improvements to businesses, and no public services or local authorities will lose out from these changes.”

However, Colliers International’s head of business rates, John Webber criticised the plan.

“We agree we need to look at other means of shoring up the tax take – but declaring an abolition of the system altogether – a system that produces £26 billion of revenue for the Treasury – is naïve,” he said.

“We should learn from other countries that have fairer and equitable business rates systems and have a sensible discussion about reform to create a rates system that properly reflects the needs and obligations of UK businesses in the twenty first century.”

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