Business rates need urgent fix, Chancellor told
BUSINESS rates reforms are a ‘far cry’ from what the High Street has been promised, the country’s biggest retailers have warned.
Bosses from Marks & Spencer, Sainsbury’s and Currys slammed tweaks to the tax, which leaves physical stores still facing a high tax burden.
Business rates are charged on shops, pubs and other business properties based on their rental value.
Critics say the system unfairly punishes those with a physical presence in town centres, while online players face lower bills.
The Government had promised a ‘fundamental’ review, but retailers said changes so far are insufficient and warned that the tax is still ‘throttling local economies’.
M&S chief Stuart Machin said shops make up just more than 5pc of the economy, but pay almost a quarter of business rates, stifling investment and forcing up prices.
Machin, 52, said the levy ‘cannot continue’ as it is, adding: ‘We welcomed the Government freezing rates and ending downwards transition last year but it’s time they take decisive action to protect the retail industry, create jobs, bring customers back and support communities.’
Alex Baldock, who runs Currys, said: ‘The system is outdated and punitive, and change is necessary to keep pace with a modern retail environment. We’d like to see the Government follow through on the promise of fundamental reform.’ He added that while recent changes were welcome, ‘there is a long way to go’. The changes included scrapping a transition period for businesses to benefit from lower bills and more frequent revaluations. And Chancellor Jeremy Hunt was praised last year for handing firms £13.6bn in business rates support.
The British Retail Consortium said they were ‘essential steps’, but described them as ‘a far cry’ from the Conservatives’ 2019 manifesto pledge.
Chief Helen Dickinson said: ‘The broken business rates system is a drag on investment, jobs and town centres.’
Sainsbury’s finance boss Blathnaid Bergin said any changes that lower business rates bills would help lower prices and increase pay.
The Government said it has provided ‘ generous’ business rates support while its reforms had helped level the playing field between bricks and mortar stores and online retail.