Many businesses have welcomed the news that the Government will introduce a new scheme to…
Some of the UK’s top retail stores, including Asda and Boots, have joined the fight against spiralling business rates.
It comes after many leading retail bodies published a letter calling for the Chancellor of the Exchequer, Sajid Javid, to address tax rules to boost the UK high street.
The Association of Convenience Stores (ACS) joined the British Retail Consortium (BRC), the Booksellers Association, Asda, Boots, the Co-op, and Specsavers, among many others, in signing the letter.
According to the latest data, the retail sector accounts for 10 per cent of all business taxes and 25 per cent of all business rates despite accounting for just five per cent of the economy.
This has in part been attributed to business rates rising by more than 50 per cent since they were introduced in the 1990s, resulting in the UK having one of the highest commercial property taxes in the world.
Evidence also shows that a huge number of retailers are not able to keep on top of the spiralling rates. The most recent statistics show that retail unit vacancy rates have risen to 10.3 per cent – the highest rate in almost five years.
The retailers have now called on the Government to put business rates front and centre of future policy decisions to prevent the death of the British high street.
Addressing the major challenges posed, the letter makes four recommendations, summarised below:
- 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.
Commenting on the letter, James Lowman, the Chief Executive of the ACS, said: “It’s a really outdated system, it’s designed for a time when there only was physical retail, and people doing business from physical premises. That has been changing for a long time.
“The biggest thing is the way it’s a disincentive to investment – so if you take a retail shop and you improve it, you put in things that are not just important to the business, but are probably important to that community, like CCTV, solar panels perhaps, bringing in a cash machine, that sees your business rates bills significantly increase.
“Now surely it should be the other way around. We should be encouraging and incentivising investment, rather than penalising businesses for it.”