Over 50 retailers have called for Chancellor Sajid Javid to fix the “broken business rates system”, which they say is key to boosting investment and revitalising the economy.
Some of the high street’s biggest names have written to the Chancellor, including national chains such as Greggs, Boots, Sainsbury’s and John Lewis.
“Retail accounts for 5pc of the economy but pays 10pc of all business taxes and 25pc of all business rates. The rate has risen by 50pc since business rates’ inception in the 1990s, and 20pc in the last decade alone,” said the letter, co-ordinated by the British Retail Consortium and backed by bosses of M&S, Iceland Foods, Primark and dozens more.
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
Implementing 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,” the bosses wrote.
“The measures would kick off the process to facilitate the required changes in our high streets, protect jobs and maintain the strong community connections retailers have.”
James Lowman, chief executive, Association of Convenience Stores, said: “Retailers investing in their businesses need support and incentives, not to be hit with increased business rates bills. 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.”
The letter comes the day after BRC-Springboard data showed that UK high-street vacancy figures had risen to 10.3pc, the highest since January 2015. It also came shortly after the BRC-KPMG Retail Sales Monitor had 12-month average sales figures dropping to their lowest level on record – 0.5pc.
Business rates are an important source of Government revenue, however. The tax brought in more than £30bn in the last financial year. The Office for Budget Responsibility expects that to rise to almost £35bn by 2023-24.