Retail

Prompt action needed to reduce business rates burden on UK retail: BRC

23 Sep '21

2 min read

Pic: Shutterstock

The British Retail Consortium (BRC), in a new report, has urged the UK government to take immediate action to reduce the business rates burden on retailers. This would help to “unlock the industry’s potential to support the economic recovery from the pandemic, ensuring that retail remains a provider of quality jobs and an important contributor to tax revenues for years to come,” it said.

The survey of retailers shows that unless business rates barriers are addressed, the government will miss a key opportunity in supporting their ambitious levelling agenda. Eighty three per cent of retailer respondents said it is ‘likely’, ‘very likely’ or ‘certain’ that they will close shops if the business rates burden is not reduced as a result of the Fundamental Review.

The UK government announced a Fundamental Review into business rates in 2020, which will report back this autumn. The targets of the review include “reduc[ing] the overall [rates] burden on businesses”.

The report, titled ‘Retail, Rates and Recovery: How business rates reform can maximise retail’s role in levelling up’, is based on a survey of leading retailers carried out by the BRC.

Retail accounts for over three million jobs spread across the UK and is responsible for over £400 billion in consumer spending a year.

Eighty five per cent of retailers said business rates is an ‘extremely’ or ‘very important’ issue for their businesses when opening or closing stores. In two-thirds (67 per cent) of store closures in the past two years, business rates had a material impact in the decision-making process.

A quarter of stores surveyed paid more in business rates than in rents. Given the multiplier of 51.2 per cent, the rates liability should be approximately half of the rent paid.

The report makes a number of essential recommendations aimed at encouraging investment and securing the viability of shops and high streets. The key recommendations include cutting the multiplier to its original rate of 35 pence in the pound (35 per cent); fixing the system of transitional relief, which cost retailers over £500 million between 2017 and 2020; introducing an ‘improvement relief’ to ensure that rates bills do not rise immediately as a result of investment in a property; and reforming the Valuation Office Agency to ensure accurate valuations and faster processing of appeals.

Fibre2Fashion News Desk (DS)

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