Retailers ‘burdened’ with tax increases

01 April 2010

A series of new property tax increases threatens to damage retailers’ ability to do business, a leading lobbying group claims.

The British Retail Consortium (BRC) says increases in business rates, which come into effect today (April 1), are burdening retailers with unwieldy costs and it calls on the government to reappraise the system and only introduce affordable rises.

Every five years, rateable values are recalculated based on how much it would cost to rent commercial properties and this month’s revaluation will, the BRC says, result in a substantial rise in many retailers’ property costs.Business rates are also subject to an annual inflationary increase based on the previous September’s retail price index (RPI) – a measure of inflation.

The BRC argues that 2008 saw the highest September RPI figure for over 10 years, causing an “inflation-busting” rise in last year’s rates.Firms were allowed to defer part of 2009’s increase to this April and many retailers will have to deal with these demands as well as revaluation costs.

And businesses in London could also be facing the ‘Business Rate Supplement’, an extra levy of 5% to help pay for the Crossrail link.

“Retailing is responsible for nearly three million jobs in the UK. As property costs are a major overhead for retailers, any significant increase will limit their ability to create and maintain jobs,” said BRC director general Stephen Robertson.“Retailers already pay a quarter of the £24 billion in business rates in England – more than any other sector. April’s property tax hikes, including business rates revaluation, will hinder retailers; vital role in contributing to the recovery.”

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Retailers ‘burdened’ with tax increases	Back
01 April 2010 A series of new property tax increases threatens to damage retailers’ ability to do business, a leading lobbying group claims. The British Retail Consortium (BRC) says increases in business rates, which come into effect today (April 1), are burdening retailers with unwieldy costs and it calls on the government to reappraise the system and only introduce affordable rises. Every five years, rateable values are recalculated based on how much it would cost to rent commercial properties and this month’s revaluation will, the BRC says, result in a substantial rise in many retailers’ property costs.Business rates are also subject to an annual inflationary increase based on the previous September’s retail price index (RPI) – a measure of inflation. The BRC argues that 2008 saw the highest September RPI figure for over 10 years, causing an “inflation-busting” rise in last year’s rates.Firms were allowed to defer part of 2009’s increase to this April and many retailers will have to deal with these demands as well as revaluation costs. And businesses in London could also be facing the ‘Business Rate Supplement’, an extra levy of 5% to help pay for the Crossrail link. “Retailing is responsible for nearly three million jobs in the UK. As property costs are a major overhead for retailers, any significant increase will limit their ability to create and maintain jobs,” said BRC director general Stephen Robertson.“Retailers already pay a quarter of the £24 billion in business rates in England – more than any other sector. April’s property tax hikes, including business rates revaluation, will hinder retailers; vital role in contributing to the recovery.”