MPs have launched a wide-ranging review into business rates, examining a number of areas including firms’ ability to pay rates and potential alternatives to property-based business taxes.

The Treasury Committee inquiry will look at how the current business rates system is operating and the associated impact on business.

It will cover the impact of changes in rates policy since 2017 on businesses, in particular: the changes in reliefs and allowances; the ability of businesses to pay; and the relationship between business rates and the behaviours it drives in business.

The inquiry will also examine how the current system measures up against “pillars” of good tax policy, including fairness, supporting growth and encouraging competition, providing certainty, and coherence.

Alternatives to property-based business taxes, such as the proposed digital services tax, will also be covered in the inquiry.

Welcoming the review, Association of Convenience Stores chief executive James Lowman said: “The Treasury Select Committee should start by examining how business rates penalise retailers who invest and add new services to their offer. This tax on investment damages our sector and the UK economy.

“Petrol forecourt stores and free-to-use cash machines are particularly badly treated by the current system because they are rated according to a different system which taxes their usage and sales. The impact of business rates on the provision of these vital services should be a priority for the committee and for the government.”