Retailers call on rates review to save the high street
Retailers today called for a radical shake-up of the UK’s 400 year-old business rates system and for greater support of the ailing high street as the government launches its biggest review into the controversial tax “in a generation”.
Business rates, which are charged on commercial properties including shops and warehouses, deliver around £25bn to the Treasury every year. However, the system has been blamed for the demise of the high street and for putting extra strain on businesses already struggling with declining footfall as consumers increasingly shop online.
Retailers argue that the burden of rates, calculated according to the rental value of properties, is out of line with their profitability and unfairly benefits online retailers, who do not have as many large properties.
Chief secretary to the Treasury Danny Alexander today announced the “most wide-ranging review of national business rates in a generation”, with the findings expected to be published ahead of the 2016 Budget.
The Association of Convenience Stores welcomed the review, saying the industry needed a system that “offered incentives for investment” rather than punished businesses for improving their stores.
“Increases in business rates can make the difference between a local shop being viable and closing down. This review must look at the overall income from business rates, and allow it to change with economic cycles, rather than always increasing as is currently the case,” chief executive James Lowman said.
CBI boss John Cridland said: “This review provides an opportunity to go much further and we’ll be making the case for removing the smallest firms from paying business rates completely, and introducing more frequent valuations.”