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Call for change

‘Replace business rates with online tax,’ say firms

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Firms say online rivals have an unfair advantage

More than eight in ten executives believe that the business rates system should be replaced with an online sales tax, according to new research.

In a survey of just over a thousand business leaders, accounting firm BDO, found that 84% wanted the rates system to be overhauled.

Business rates are increasingly seen as a punitive tax on companies that need a physical presence, putting them at a disadvantage to rivals operating online.

The system has been subject to review across the UK, resulting in some changes in 2018 following the Barclay report.

However, there continue to be anomalies and a view that it is a punitive tax at a time of growing ecommerce. Some businesses now favour complete abolition of what is seen as an outdated form of tax.

The leap in digital shopping and lengthy closures of bricks-and-mortar stores during the Covid-19 pandemic have intensified demands for change.

Many companies have been granted a reprieve from paying business rates as a result of the Covid-19 crisis.

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