The Institute for Fiscal Studies (IFS) has criticised the UK government's proposed reforms to business rates, warning that they could lead to tax losses for local authorities and uneven distribution of benefits among businesses.
The IFS analysis, which examines the government's plans to introduce a new business rates system in England, suggests that the reforms could result in a loss of up to £1.4 billion in tax revenue for local authorities over the next five years. This, the IFS warns, could have significant implications for public services such as education and healthcare.
The report also highlights that the reforms could disproportionately benefit larger businesses, while smaller firms may not see significant reductions in their business rates bills. This, the IFS argues, could exacerbate existing inequalities in the business community.
The government has argued that the reforms will help to reduce the burden of business rates on smaller firms, but the IFS analysis suggests that this may not be the case. The government has promised to review the impact of the reforms and make further adjustments as necessary.
The IFS has called for a more nuanced approach to business rates, one that takes into account the specific needs and challenges of different types of businesses. The organisation has also urged the government to provide more support for local authorities, which will be affected by the loss of tax revenue.