Lib Dem plans to cut tax for struggling high street retailers across the country

November 18, 2019 4:35 PM

Lib Dem plans to cut tax for struggling high street retailers across the country

Sir Ed Davey, the Liberal Democrat candidate for Chancellor of the Exchequer, has announced plans that will replace the analogue tax of business rates that is hitting our high streets. The Commercial Landowner's Levy has been developed to revitalise communities spur on development and cut tax for so many struggling high street retailers.

By taxing business premises and equipment, Business Rates are a disincentive to investment, holding back productivity and ultimately economic growth

This effect is particularly marked in capital-intensive sectors such as manufacturing and renewable energy, which are crucial to the Industrial Strategy and Britain's success as a 21st century sustainable economy.

It would be more efficient to tax solely the land value of commercial property, removing the disincentive to invest and enabling the state to better capture increases in land value driven by public infrastructure investment. The Landlord would be assessed to the levy and not the tenant.

Helen Cross, Liberal Democrat candidate for Brentford and Isleworth commented:

"Shops, pubs and restaurants across the borough are finding it increasingly difficult to manage escalating rents and business rates. The 2017 business rates revaluation has been a particular burden for London based businesses."

"High street shops must pay crippling rates on their bricks-and-mortar premises, while internet giants such as Amazon pay much less for out-of-town warehouses".

"Rather than increasing tax bills on businesses when they improve their leasehold premises, the Commercial Landowner Levy would shift business rates to commercial property owners with a view to taxing land values only and capturing increases in land values driven by public and community investment. This land value capture would help make the business case for new publicly-funded infrastructure across London, while businesses investing in leasehold improvements would not face higher taxes as a result."

ENDS

Notes to Editors:

The Commercial Landowners Levy was developed following calls for reform of business rates from all the major business organisations, including the CBI, the FSB, the BCC, the BRC, the EEF and the IoD.

The research underpinning the policy was published in the report https://www.libdems.org.uk/taxingland-notinvestment

a. Under the CLL, business taxes would be lower in 92% of local authorities - with tax cuts of up to 25% in the poorest areas - helping to rebalance Britain's extremely unequal regional economy and alleviating the crisis on our high streets.

b. The majority of economic sectors would receive a boost under the CLL, with lower bills in manufacturing, hospitality, shops and energy generation among other sectors.

c. Under the CLL, 61% of small and medium sized businesses in England currently renting their premises would no longer need to pay property tax, although it is likely that some of the tax would be passed down through higher rents.

d. With the number of commercial land plots (720,000) in England far lower than the number of individual premises (2 million), the CLL would shift the burden of tax away from small businesses onto a smaller number of large commercial property companies, saving both businesses and councils precious time and money