Retailers call for urgent action to fix business rates

A group of more than 50 major retailers – including Asda and John Lewis – have urged the government to fix the ‘broken’ business rates system.

The high street chains have written a letter, supported by the British Retail Consortium (BRC), to the new chancellor, Sajid Javid, calling for a ‘wholesale review of business taxes to create a tax regime fit for the 21st century’.

The letter claims the current system is ‘hindering’ investment plans and ‘detrimentally impacting communities up and down the country’.

The letter asks for four immediate ‘fixes’ that would address many of the retailers concerns, including a freeze in the business rates multiplier and ensuring that the Valuation Office Agency is fully resourced to do its job.

It comes after the BRC published figures, which show one in ten town centre shops was empty last month.

According to the BRC, the national town centre vacancy rate was 10.3% in July, which is the highest since January 2015.

The figures also show that high street footfall declined by 2.7% last month, while retail park footfall increased by 1.2% and shopping Centre footfall declined by 3.1%.

‘The fact that over 50 retail CEOs have come together on this issue should send a powerful message to government,’ said BRC chief executive, Helen Dickinson.

‘Retail accounts for 5% of the economy yet pays 25% of all business rates – this disparity is damaging our high streets and harming the communities they support.’

In June, the directly-elected mayor of the West Midlands, Andy Street, also warned the current business rate system must be overhauled in order to help town centres.

Speaking in front of a parliamentary select committee, Mr Street called for reduced rates for new and expanding businesses, as well as a 100% relief for public sector organisations who bring their services into high street units.

The joint managing director of Iceland Foods, which also signed the letter, Richard Walker added: ‘Business rates are an outdated Victorian taxation system that have little relevance to our modern multi-channel retail economy.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.’

Photo Credit – Stevepb (Pixabay)