UK retailers call for business rate reform to boost sector
The British Retail Consortium is once again urging the government to commit to overhauling business rates in the Autumn Statement.
The government needs to commit to a complete overhaul of the business rates system to give the retail industry a much-needed boost, especially in the case of small firms.
That is the view of the British Retail Consortium (BRC), which has published the details of its submission to HM Treasury ahead of this year’s Autumn Statement – the second biggest financial announcement of the year after the Budget in spring.
The BRC submission focuses heavily on the impact of business rates, which have been a key lobbying point for the organisation for years.
Various measures have been introduced to mitigate the impact of high business rates on small companies in particular – but BRC says that rather than tweaking at the edges, it is time to make fundamental changes to one of the most difficult areas of business taxation.
Retailers have been among the strongest critics of business rates. Especially since the financial crisis, the total rates paid have risen disproportionately compared to rents, which the BRC says is unfair. What’s more, it’s even been linked to the decline of the high street and the difficulties faced by many retail businesses.
CityAM reports that retail property market rents have slipped by eight per cent since 2008, as total business rates paid by retailers have soared from £5.2 billion to £5.8 billion in the same period. At the same time, BRC says that retail investment has fallen. Bringing it back to pre-recession levels could be worth more than 40,000 jobs.
The financial burden that rates place on companies has clearly been recognised by the government, which has introduced rate freezes and discounts as well as a relief system for small businesses.
Yet fundamental change has not yet appeared.
That will take time, BRC acknowledges, and it isn’t expecting reforms to be announced straight away. Rather, its submission sets out that more short-term relief would help to bridge the gap until a complete overhaul can be announced.
“We do not have any expectation that this could be fulfilled in advance of the general election but an indication that it will be on the agenda for a future government will resonate very well across British business and facilitate further planning to allow business to play a fuller part in the economic recovery,” said Helen Dickinson, director general of BRC.