Replace the current business rates system with a taxation system that is based on sales/revenue. Create an environment that is more reactive and flexible. It would be more progressive and encourage more people to start up new businesses.
Being tied to performance has multiple benefits.
It would have automatically adjusted to changes in spending during the COVID-19 pandemic. Businesses that were closed would not have to pay as they were not generating turnover. If they were trading at a reduced turnover, then the cost would have reduced proportionally. If a business had seen an increase in sales during the pandemic, they would pay more, but only in line with increased turnover. It would have prevented the need to give blanket rates relief. Which while protecting some businesses it unnecessarily benefitted those that already had an advantage.
A new system that changes the distribution of the tax burden as the economy evolves. Preventing the need to introduce new separate taxes such as the online sales tax. Why not have a single method of taxation that is fair to all. Simpler for businesses to plan and for the government to administer. It would also remove the need to attempt to forecast and balance multiple different taxes. There would be a lag in changes and an unwanted imbalance in the system.
It would encourage new businesses to start up, with the tax being ‘pay as you trade’, not a fixed amount based purely on location and rent. As a business grows then the contributions follow. In tougher times it would reduce. Encouraging more new start-ups would breathe new life into high streets across the whole country and increase employment. It would be simple to also implement a rate-free amount to support small and new businesses.
It would spread the tax burden proportionally across the economy not just on business with physical locations. For example, turnover generated by online platforms selling advertising in the UK would be taxed the same as an independent coffee shop, which at the moment can shoulder a disproportionate share.