Today at conference, Liberal Democrats have voted for a comprehensive plan for replacing the broken business rates system.
The motion based on the report – Taxing Land, Not Investment – calls for the abolition of business rates and its replacement with a tax on land values, the Commercial Landowner Levy (CLL). The levy would remove buildings and machinery from calculations and tax only the land value of commercial sites, boosting investment and cutting taxes for businesses in nine out of ten English local authorities.
Key recommendations from the motion include:
- Business rates should be abolished and replaced by a Commercial Landowner Levy based on the value of commercial land only
- The levy should be paid by owners rather than tenants
- Non-residential stamp duty should be scrapped to improve the efficiency of the commercial property market
- Commercial land should be taxed regardless of whether the buildings above it are occupied; the tax should also apply to unused and derelict commercial land
The full report can be found as a pdf here.
Liberal Democrat leader Vince Cable said:
“Business rates were a badly designed policy to begin with and have become an unacceptable drag on our economy. They are a tax on productive investment at a time of chronically weak productivity growth, and a burden on high streets struggling to adapt to the rise of online retail.
“Many of the areas around the country that voted for Brexit feel they have been left behind. In place of policies the Brexiters offer only rhetoric. Great swathes of the country demand better, and this policy offers change to the manufacturing industry and the small towns passed over by economic growth.”
Founder of the Liberal Democrat Business and Entrepreneurs Network Andrew Dixon said:
“By only taxing land and not the productive capital above it, this reform would remove a major disincentive to investment, boosting productivity and contributing to a necessary revival in UK industry. While separate action is needed to ensure online retailers pay their fair share of corporation tax, our proposals would offer a lifeline to struggling high streets.
“I am delighted to support this initiative which I believe would boost business and enterprise across the UK, and I am grateful to members of the Liberal Democrats Business & Entrepreneurs Network for their valuable contributions to this important research”