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The British Property Federation (BPF) has called for “immediate intervention” to bring forward an £8.5bn boost for UK high streets if the fundamental reform of business rates is delayed.
It revealed that analysis from property advisor Avison Young shows that as a result of the next revaluation the total annual business rates burden for retailers is set to decrease by 26% to £15.9bn from 2023, potentially saving the sector £8.5bn over the subsequent three years.
However, the current system of ‘downwards transition’ means businesses will see their rates bill adjusted gradually over several years rather than immediately.
As such, ahead of the Autumn Budget, and with uncertainty around the longer-term reform of the system, the BPF is calling on government to “act now” to end downwards transition, in order to bring forward the tax boost for retailers and ensure the level of rates paid is closer aligned with post-Covid market conditions.
The BPF added it has been campaigning for fundamental reform of business rates for over a decade, arguing that the underlying level of taxation is “simply too high”, calling for annual revaluations and an end to the requirement for the system to raise the same amount year after year regardless of economic performance, creating a more “agile, flexible and equitable system”.
Melanie Leech, chief executive, British Property Federation, said: “If, as expected, the chancellor announces a delay in business rates reform this week, the chancellor must look at ways to ease the pressure on the high street in the meantime, as we enter a critical phase in the recovery from Covid-19.
“The retail sector could save £8.5bn from 2023 but under the current system it will take many more years for businesses to feel the benefit.”
She added: “We recognise that reforming the system is complex and will take time to implement, but in the meantime an end to downwards transition will mean that retailers can plan for significantly lower occupational costs from 2023, helping them forward-plan and protect jobs.
“Such is the urgency on the high street we need Government to be bold and pragmatic now, whilst longer-term reform is being agreed.”
