The Housing, Communities and Local Government Select Committee has called for reforms to taxation, including business rates, in a report looking at the future for high streets and town centres.
The committee has undertaken a six-month inquiry, during which it noted: “Barely a week went by without headlines pronouncing the ‘death of the high street’ or a major retailer announcing a restructuring or a fall in profits.”
The report calls for local government to be given greater powers and funding from central government to help promote “large scale structural change”, and for a reform of planning policy.
Clive Betts, chair of the committee said: “Dated planning policy must be reformed to reflect the needs of modern high streets and town centres.
“Business rates must be made fair.
“They are currently stacking the odds against businesses with a high street presence and this must end.
“Tax reforms are needed to level the playing field between online and high street retailers, and we urge the government to investigate all the options in this area, including an online sales tax.”
The committee said that high street retailers are paying an unfair proportion of tax, with Amazon paying around 0.7% of its UK turnover against 1.5% to 6.5% for bricks-and-mortar retailers.
In addition to an online sales tax, the committee also called for an increase in VAT, and a ‘green tax’ on deliveries and packaging.
The money raised by these measures should be used to reduce business rates for retailers on high streets and in and town centres, to fund a 12-month holiday from rate increases for retailers which invest in their properties, and to increase the funding available through the government’s High Streets Fund.
The government itself is consulting on business rates reform ahead of the roll-out of 75% retention in April 2020.
Earlier this week the IFS said that these proposals needed more work done on them.
