Busi­ness rates shake up ‘must top the agenda’

Scottish Daily Mail - - City & Finance - by Tom Witherow

RE­FORM of the busi­ness rates sys­tem must be at the top of a new govern­ment’s list of pri­or­i­ties in or­der to save the High Street, the re­tail­ers’ trade as­so­ci­a­tion has de­manded.

The ‘un­fair’ tax means shops pay a quar­ter of all busi­ness rates, even though they make up just 5pc of the econ­omy, the Bri­tish Re­tail Con­sor­tium (BRC) said.

The an­nual £7bn bill has risen ahead of the rate of in­fla­tion since the tax was in­tro­duced 30 years ago. It is one of the high­est prop­erty taxes in the de­vel­oped world.

The BRC, which rep­re­sents 150 of the coun­try’s big­gest re­tail­ers in­clud­ing the likes of Sains­bury’s and John Lewis, is de­mand­ing the next Chan­cel­lor step in to re­form the ‘bro­ken’ sys­tem. The bur­den of the tax, levied on a busi­ness’s premises, con­trib­uted to 3,200 store clo­sures in 2018 leav­ing one in ten High Street shops sit­ting empty, the BRC said.

In all 125 re­tail busi­nesses went into ad­min­is­tra­tion last year. Dozens of big names fol­lowed suit in 2019 con­tribut­ing to 85,000 job losses in the last 12 months.

As many as 16 shops per day closed in the first half of this year, ac­cord­ing to re­search by PWC and the Lo­cal Data Com­pany.

A BRC spokesman said: ‘As po­lit­i­cal par­ties draw up their man­i­festos in the com­ing weeks, they should spare a thought for their lo­cal re­tail­ers, the three mil­lion vot­ers they em­ploy, and the bil­lions in tax they con­trib­ute.’

The group has called for a scrap to the busi­ness rates ‘down­wards tran­si­tion’, which it says will take £1.3bn from re­tail­ers over five years. This is the means by which the tax on premises is cor­rected when the bill is wrongly cal­cu­lated.

In­stead of im­me­di­ately putting the busi­ness’s tax bill right, the an­nual amount payable is only re­duced grad­u­ally – mean­ing they pay more over­all.

The way busi­ness rates is cal­cu­lated has been slammed by crit­ics. Doug Put­man, the boss of HMV, said his rates bill were many times the rent bill at some of his stores.

The Trea­sury Se­lect Com­mit­tee of MPs last month called on pol­i­cy­mak­ers to find an al­ter­na­tive, say­ing the rates sys­tem was un­fair, overly complex and un­fit for the way mod­ern busi­nesses run.

This pa­per, which is cam­paign­ing for a new sys­tem, yes­ter­day re­ported de­mands for re­form from the bosses of Ikea UK, Hal­fords and Pri­mark. Dave Lewis, the boss of Tesco, has also spo­ken out. Ear­lier this month he called for im­me­di­ate re­lief on busi­ness rates and the in­tro­duc­tion of a 2pc on­line sales tax.

He said there are Tesco shops that are pay­ing more than 50pc of the value of their prop­erty in tax. The BRC also sup­ports re­form­ing the Ap­pren­tice­ship Levy to al­low re­tail­ers to spend money on a range of train­ing pro­grammes.

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