Retailers demand business rates reform
Written by Peter Walker
Over fifty major retailers have come together to demand the government takes action to fix the business rates system.
In a letter to the new chancellor, Sajid Javid, High Street brands have called for tax reform to be at the heart of the promised new economic package.
Coordinated by the British Retail Consortium (BRC), the letter asks for four fixes that would address many of the challenges posed by business rates:
• A freeze in the business rates multiplier
• Fixing transitional relief, which currently forces many retailers to pay more than they should
• Introducing an ‘improvement relief’ for ratepayers
• Ensuring that the Valuation Office Agency is fully resourced to do its job
The letter noted that implementation of these four recommendations “could be undertaken quickly, would reduce regional disparities, remove barriers to the proper working of market forces, incentivise economic investment, and cut away at least some of the bureaucracy of the current system”.
Helen Dickinson, chief executive of the BRC, said that the new government has an opportunity to unlock the full potential of retail in the UK, and the economic package provides a means to do so.
“Retail accounts for five per cent of the economy, yet pays 25 per cent of all business rates – this disparity is damaging our high streets and harming the communities they support,” she stated.
The letter comes the day after BRC and Springboard data showed that UK vacancy figures had risen to 10.3 per cent, the highest since January 2015, while the latest BRC and KPMG retail sales figures showed the 12-month average sales figures dropped to their lowest level on record, at 0.5 per cent.
James Lowman, chief executive at the Association of Convenience Stores, commented: “The business rates system needs fundamental change to address this perverse incentive – there is much more the government can do now to help small businesses, and their first priority should be extending rate relief for more businesses and for beyond the next financial year."
Richard Walker, joint managing director at Iceland Foods, added: “Business rates are an outdated Victorian taxation system that have little relevance to our modern multi-channel retail economy.
“Fundamental reform of the system is the only way we will stem the decline of high street communities up and down the country."