Retailers debate new call for rates reform

Caldicot Kitchen and Bathroom Centre in south-east Wales is appealing what it describes as a “random” increase in the business’s rateable value – the annual market rent value given to a non-residential property on which business rates are calculated.

John Pelosi (pictured), owner and director of the independent showroom, based in an industrial park just outside Caldicot, said that the past year had been a “headache” with its property revalued in such a way that raised its annual business rates by more than four times the amount they had been paying previously.

This is despite a reduction in the rateable value for businesses in large parts of the nearby Welsh valleys, Pelosi argued.

“Nothing whatsoever had changed in our business,” he told kbbreview. “Meanwhile, a local competitor on the high street in a busy market town getting high footfall has a lower rateable value than us. It doesn’t make sense.”

As the British Retail Consortium (BRC) earlier called for a “fundamental reform of the business rates system” and a business taxation system fit for the 21st century, Pelosi said: “There needs to be far more clarity, consistency and transparency over how rateable values are set – perhaps based on a sensible marker like profit, rather than random criteria, like whether the property is used for a stockroom, a warehouse or a showroom.”

The BRC has called on UK Government to freeze business rate rises until 2021 to support retailers “at a critical time”, as the country’s largest private sector employer battles multiple cost pressures from government policies, including the National Living Wage, Apprenticeship Levy, and the urgent need to transform their businesses to cater for tech-savvy shoppers.

Helen Dickinson, chief executive of the BRC, said: “The current business rates system is not fit for purpose. It is a 20th century answer to a 21st century problem. Retail shoulders far more than its fair share, and the rates bill is leading to store closures and getting in the way of reinvention of our high streets.”

The ex-CEO of Iceland and Wickes Bill Grimsey also slammed the existing business rate system in a second report on the state of the UK high streets and town centres out earlier, calling it “outdated and unfair”.

There were general nods of agreement in the KBB industry, although ideas differed as to how things could be done differently.

Harvey Jones Kitchens managing director John Curwen said: “With 32 showrooms across the UK, like many other businesses we are affected by business rates. Therefore, we  welcome the three-year freeze the BRC is proposing.”

Former Bathstore CEO Gary Favell suggested that online retailers should be paying a levy in a fairer world of business taxation, adding that the UK Government could definitely do more to support bricks-and-mortar retail.

Meanwhile Tim Forsey, owner and managing director of kitchen showroom Newark Interiors in Nottinghamshire, said that a fairer business rates system should be based on means testing and would vary with region and sector, and be dependent on revenue and costs.

“Kitchen businesses are a big-ticket industry, so I don’t necessarily think we should be exempt from rates rises, like potentially a small, local florist or independent coffee shop deserves to be. For them, it could mean survival or closure. It shouldn’t mean that for a business in the KBB industry.”

• See Opinion piece from Nathan Hopper of Simply Kitchens in Plymouth

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