Dissatisfaction with business rates has reached an all-time high, following a long-delayed and poorly implemented rates revaluation in 2017 and a deepening crisis on St Albans’ high street.
Rising business costs and unsustainable levels of rent are placing disproportionate pressure on local businesses (through tax inequality), leading to closures, loss of jobs and a reduction of investment in the local economy.
In December 2018 Chris Davis, councillor for Verulam ward, tabled a motion to tackle this pressing issue.
The motion called on St Albans District Council to consider abolishing the business rate system and replacing it with a commercial landowner levy (CCL) – a tax on the owner of the property. The result would be a net tax cut for businesses.
Under the CLL, small and medium-sized businesses who currently rent their premises would no longer need to pay property tax. This would go a long way to alleviate pressure on their cashflow.
This could result in lower taxation, with a 2.5 per cent reduction across business rates collected in St Albans (£62 million in 2016-17), saving at total of £1.55 million.
Chris Davies said: “By choosing a radical change to the existing and unfair business rate system, this council will ensure it is supporting local businesses at a time of local and national economic uncertainty.
“I’m pleased my motion was passed by council, but we still have a journey to travel to ensure the Tory cabinet that runs the council follows it through and truly champions local business and the high street.”
There are other, wider benefits too. The CCL will mean investment in premises and equipment, such as renovation, new machinery and solar panels. Also it would remove the need to increase rates bills, so boosting investment and raising productivity and initiative in local businesses and the green economy.
It’s the Lib Dems who are the party of business.