Retailer challenges to business rates on the up
Written by Hannah McGrath
The government has been urged to ease the business rates burden on High Street retailers after challenges to bills rose by 65 per cent in the first quarter of 2019.
According to new figures from law firm RPC, there were 4,000 challenges made to business rates bills in the first three months of this year, up from 2,430 in the fourth quarter of last year.
The research also revealed that 12,390 challenges have been lodged with the Valuation Office Agency since April 2017, as the High Street battles a perfect storm of inflation, rising bills and declining footfall, as shoppers switch to online channels.
Earlier this month, more than 50 major retailers wrote to new chancellor Sajid Javid demanding the government takes action to fix the business rates system.
The British Retail Consortium has consistently called on the government to relieve the tax burden on struggling retailers in order to shore up the survival of the High Street.
Jeremy Drew, co-head of retail at RPC, explained that the property tax is so complex that each new ratings review sees thousands of challenges lodged by businesses.
Business rates are calculated based on property values and a multiplier that rises with inflation.
Recent research cited by RPC suggested that nearly one in six businesses has faced a claim in the magistrate’s court because it has not paid its business rates in the past year.
Drew said: “The sharp jump in challenges shows that the burden of business rates is causing more and more pain for retailers.
“The government is being encouraged by retailers to act now by cutting business rates to ease that burden – doing so should dramatically help an industry that is one of the UK’s biggest employers.”
However, Drew added: “The government needs to go further than it did last Autumn when business rates were reduced for only the smallest of retailers. The retail sector’s view is that the changes made just tinkered around the edges and made the business rates regime even more complex.”