Over fifty major retailers have come together to demand the government takes action to fix the “broken” business rates system.
In a letter to the new chancellor, Sajid Javid, retailers have called on the government to put business rates “at the heart” of the promised new economic package. The letter, coordinated by the British Retail Consortium (BRC), has been signed by major retailers including the CEOs of supermarkets, food-to-go, fashion, homeware, and department store retailers.
Retail remains as the largest private sector employer in the UK, employing approximately three million people and accounts for 5% of the UK economy, yet the BRC explains the sector is currently “burdened” with 10% of all business taxes, and 25% of business rates
The letter asks for four fixes that would address many of the challenges posed by business rates:
- 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.
The letter notes that implementation of these four recommendations “could be undertaken quickly, would reduce regional disparities, remove barriers to the proper working of market forces, incentivise economic investment, and cut away at least some of the bureaucracy of the current system.”
Helen Dickinson, chief executive of the BRC, said the four fixes outlined in the letter “would be an important step” to reform the “broken business rates system which holds back investment, threatens jobs and harms our high streets”.
She added that the new government has an opportunity to “unlock the full potential of retail in the UK”, and the prime minister’s economic package provides a means to do so.
She said: “The fact that over 50 retail CEOs have come together on this issue should send a powerful message to government. Retail accounts for 5% of the economy yet pays 25% of all business rates – this disparity is damaging our high streets and harming the communities they support.
“By taking swift action of these recommendations, the chancellor would send a clear message that the new government understands the needs of local communities and that it will act decisively to support the jobs of the country’s largest employer.”
The letter comes the day after BRC-Springboard data showed that UK Vacancy figures had risen to 10.3%, the highest since January 2015.
Michael Ward, managing director Harrods, one of the retailers to sign the letter, added: “Our hope is that this new government has both the foresight and the ambition to undertake a drastic review of Britain’s out-dated business rates tax system. A good start in ensuring we have a tax regime fit for the 21st century would be ensuring that any proposed economic package this Autumn contains the common-sense measures proposed by the BRC in its letter to the chancellor today.”