The New West End Company, which represents retailers in London’s West End has called for a £5bn reduction in business rates, financed by a 1% tax on online retailers.
This week’s Conservative Party conference has seen representatives of the organisation lobbying for the reduction. Businesses across the West End will see a rate bill rise of up to 49% plus inflation next April according to the New West End Company.
Luxury retailers such as Burberry are set to be hit the hardest according to real estate advisors Altus Group, with it facing a 3 year cumulative increase of 186% in its rates bill taking its liabilities to £2.7m next April. Christian Dior will also be hit hard seeing a 151% rise compared to pre revaluation levels taking its bills to £2.8m.
Other affected retailers include Louis Vuitton which will see it’s bill rise from £2m before the revaluation to £4.5m next April, a cumulative rise of 122%. Elsewhere, Selfridges bill will have rocketed £6.6m from £10.9m in 2016/17 to £17.5m for 2019/20.
Transitional relief is a method of limiting significant variations in business rates bills with both large increases and decreases under the revaluation gradually being phased in. The New West End Company has published a list of retailers within the area it represents, showing the increases faced by each store.
Robert Hayton, head of UK business rates at Altus Group, said: “Our system of business rates was created nearly 30 years ago, before the advent of online shopping, and with the UK having the third largest e-commerce market in the world, it is vital that the Government develops a coherent approach to taxing the digital economy.
“A bespoke sales tax for large pure play online retailers to level the playing field, given the advantage enjoyed by the digital economy, is certainly a feasible option open to the Chancellor but any additional revenue raised through a new tax must be ring fenced.”