Business Rates are set to rise once again, to 50.4p in the pound, meaning retailers will now shoulder an additional £200 million of taxes, and causing the British Retail Consortium (BRC) to call for an end to this High Street burden.

In a submission made to the Treasury Select Committee today, the BRC set out a framework to fix the business tax system under the principles of Relief, Review and Reform.

Since they started in 1990, Business Rates have risen 45 per cent, from 38.4p to 50.4p in the pound, meaning shops will now be paying over half of their rateable value again in Business Rates before they have even made a penny in sales.

The BRC stated that the current system is contributing to the rising number of store closures and discouraging new businesses from taking over empty shops.

Last summer, the industry body called for a two-year freeze on rates increases to provide some relief for the retail industry at a time when it is under significant cost pressure, and is going through a period of transformation driven by technology and changing consumer behaviour.

Under the current system, business owners that make improvements to their shops see their tax bill rise as the rateable value increases. For example, adding solar panels to the roof will result in a firm paying higher Business Rates.

“To add insult to injury, those firms whose rates bill is found to be too high are forced to subsidise those who are paying too little as the system lacks the flexibility to correct itself quickly,” read the BRC’s statement.

The BRC has called for a number of changes to be made, culminating in an Independent Review of Business Taxation to look at how various business taxes should be levied to ensure that the tax framework is fit for the 21st century.

Chief executive Helen Dickinson commented: “Retail is in the midst of a transformation as new technologies and changing consumer behaviour impact the way we shop – the investment needed for this reinvention is being held back by a rising tide of public policy costs, with Business Rates the biggest among these.

“While government fiddles at the edges, retail suffers and consumers pay the price,” she continued, adding: “The Treasury Select Committee Inquiry comes at a critical moment for the retail industry, if it can seize the opportunity to find a way to address the madness of a system which is strangling our high streets, they can protect shops and jobs and put British retail on the right trajectory for the future.”

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