The Liberal Democrats have today published a comprehensive blueprint for replacing the broken business rates system.
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.
This ground-breaking research was led by founder of the Lib Dem Business and Entrepreneurs Network (LDBEN) Andrew Dixon, in response to mounting concerns about the negative impact of business rates on struggling high streets and the wider economy.
Key recommendations from the report 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 report also finds:
The CLL would mean lower taxes for businesses in 92% of English local authorities. In places like Oldham, Blackburn, West Bromwich, Barrow, Middlesbrough, average taxes would be cut by over 25%, and in some cases by as much as 46%
The manufacturing and technology sectors would be the most significant beneficiaries of the CLL, receiving tax cuts of over 20%. Retailers in struggling areas would also receive a boost.
The CLL would represent a tax cut initially, but is likely to be at least revenue-neutral in the long-term. Redistribution between local authorities would be adjusted to ensure no change in local funding.
By taxing landowners rather than businesses, half a million SMEs would be spared the bureaucratic burden of property taxation. With far fewer plots of land than individual businesses, the CLL would save councils both time and money.