THE system for collecting business rates in Wales needs to be more transparent and consistent according to a National Assembly for Wales committee.

One of the recurring issues the Economy, Infrastructure and Skills Committee was told about from talking to small business owners was the confusion surrounding what the rates are for and how they are calculated.

While there was praise for the simplicity of Wales’s business rates regime, it was also acknowledged that the simpler the system, the harder it will be to target specific sectors or businesses for relief.

Business owners also said they needed clarity on the future direction of business rates. During evidence the cabinet secretary for finance, Mark Drakeford AM, indicated a willingness to fully explore the potential of alternative forms of taxation for business, including Land Value Tax.

The committee welcomed his open approach, but also warned of a danger that this process results in uncertainty for business – so any work looking at such options should be completed quickly.

The appeals process for business rates also raised significant concerns for business owners who, again, said the process of appealing a decision was confusing, lengthy and had a low success rate – suggesting the basis for many cases was misunderstood.

The committee is urging reform of the process to make it faster and fairer.

Business owners in Wrexham, Pwllheli, Cardiff, Welshpool, Swansea, Carmarthen and Merthyr Tydfil contributed to the report.

Their comments were recorded in a video shown to the committee.

“Business owners, particularly new business owners, often struggle to get to grips with the business rates system,” said Russell George AM, chairman of the Economy, Infrastructure and Skills Committee.

“Many of those we spoke to told us about the problems they had paying the rates when they were just trying to get their business off the ground, and how they thought the way rates are set is over complicated.

“We believe the Welsh Government should lift the fog of uncertainty around business rates with a transparent and consistent approach which people can quickly grasp and plan for.

“We also would like to see a clear future for the system, whether that comes under a new Land Value Tax or otherwise, and a reform of an appeals process which is currently opaque and drawn out.

The committee makes five recommendations in its report including: - Commit to improving the transparency and consistency of business rates; - Provide clarity on future direction; and - Reform the appeals process in Wales so that it is faster and fairer.

The committee’s findings will now be considered by the Welsh Government.