Should business rates be replaced with a tax on sales, including online sales?

Business rates are a property tax on non-domestic premises based on rateable value and multipliers that vary by property type and size. From April 2026, retail, hospitality and leisure properties under £500,000 rateable value benefit from permanently lower multipliers (38.2p or 43p), while those over £500,000 face a higher 50.8p multiplier; the system raises around £26 billion annually and is widely blamed for disadvantaging high street retailers against online competitors. Recent calls, including from the IPPR on 8 October 2026, propose an online sales tax to raise £1.5 billion and fund further rate reductions for physical shops, amid ongoing high street vacancy rates of around 14% and pressure ahead of the 28 October Budget.