BRADFORD business representatives say the business rates system needs an "urgent" overhaul.

The call, from the West & North Yorkshire Chamber of Commerce, follows a warning from Tesco's chief executive who has urged Government to throw Britain's ailing high streets a lifeline by slashing business rates with cash raised from a new tax for online retailers.

Dave Lewis warned prices are under pressure, innovation is being stifled and stores are closing in their thousands as companies struggle under a system that is "outdated, not fit for purpose, and doesn't reflect the way people shop today".

Referring to the succession of major high street fatalities in recent years, the business leader said it was "impossible" not to notice the increasing strain on the retail sector, but the Treasury had created a "downward spiral" by leaving the rates system relatively unchanged.

Under the current system, the amount a business pays in rates is calculated with the value of its physical premises.

Retailers that only sell products online can operate from out-of-town warehouses that are usually worth far less than commercial property in the town and city centres, meaning their rates are much less than traditional companies.

"If we don't act now, we are in danger of missing our chance. The warning signs are stacking up, with another big retail name lost almost every month," Mr Lewis said.

"As I see it, there are only two choices.

"We can prolong the status quo, losing jobs and business and impacting communities. Or we can put our tax system back in step with sales. That would level the playing field, reduce the unsustainable burden of rates and increase investment - for the good of retail, and our great nation of shopkeepers."

The proposed levy would be applied to revenue from sales of physical goods online, rather than on individual transactions, so it would be up to retailers whether to pass it on to consumers. The Chamber said business rates are a "heavy burden" and the playing field needs to be levelled out.

“We’ve previously lobbied for reform of the business rates system and that appeal remains as urgent now as it has ever been," it said.

"An alarming number of high street firms are closing or being ear-marked for closure nationally, costing many jobs in the process.

"It’s clear that the playing field for the high street and online retailers needs levelling out in some way. Last year’s short-term reduction in rates is a stop-gap measure but something more far-reaching is needed long-term. Business rates are a heavy burden that make it challenging regardless of how well a business is doing or the economy is faring.”