The Treasury Committee has launched a new inquiry into Business Rates to scrutinise how government policy has impacted business.

The committee will examine how the tax policy has changed, including Business Rates retention, alternatives to property-based taxes - such as the proposed digital services tax - and how changes to rates could impact businesses.

Nicky Morgan, hair of the committee, said that many High Street businesses are struggling to remain competitive, with estimates of 10,000 shops due to close this year.

“Unless action is taken, closures could continue and job losses may soar,” she commented.

“Business Rates can represent a substantial financial burden, so the Treasury Committee is therefore launching an inquiry today into the effectiveness and impact of these rates on business.”

Last week, in a letter to Morgan and Clive Betts, chairman of the Communities and Local Government Committee, the financial secretary to the Treasury Mel Stride warned there was a “high risk” that any tax on e-commerce sales would fall foul of EU rules on state aid – effectively ruling out the so-called ‘Amazon tax’ plan.

Last year, chancellor Philip Hammond outlined plans for a digital sales tax on the revenues of global technology giants, but said a tax on online goods sales would be counterproductive as retailers would simply pass the cost onto consumers. He followed this with a £675 million Future High Streets Fund, part of a raft of Budget measures aimed at bolstering Britain’s struggling High Streets.

Morgan committed the committee to examine how the current system is working and consider whether an alternative system - for example a land-value based tax - may help level the playing field between retailers.

“At the end of the inquiry, we’ll make a series of recommendations to government on the fairness and effectiveness of the current system, and how it could be improved,” she added.

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