Business rates relief cut to 66% as BRC and KBB retailers question a ‘broken’ system

Retailers around the UK from July 1 will have to pay a third of their business rates bill after the Government reduced its relief scheme in England from 100% to 66%.

The British Retail Consortium welcomed the fact that there would be some continuing help for struggling retailers with business rates bills, but added that it regarded the system as “intrinsically broken”.

BRC chief executive Helen Dickinson (pictured) said: “While continued business rates relief is welcome, the simple fact is that the system is intrinsically broken. This limited relief will not go far enough to support those retailers that were shuttered for months during lockdowns and are now starting to trade their way back.”

Dickinson added: “The Government must now stand by its business rates review commitment to reduce the burden rates place on businesses and ensure that the system reflects current market conditions, not outdated valuations from 2015. The Government must ensure there are no further delays to the outcome of the fundamental review and put in place bridging relief until we move to a more sensible system which takes account of market realities.”

BRC CEO Helen Dickinson
BRC CEO Helen Dickinson

Figures suggest that some two million premises took advantage of the business rates relief scheme, saving the companies involved around £14 billion. Many smaller KBB retailers are, in any case, eligible for 100% business rates relief anyway.

We polled our kbbreview100 think tank of retailers nationwide to ask what they thought about the development. Two-thirds of respondents said they had taken advantage of the rates relief scheme. None said they felt the change to 66% would adversely affect their businesses going forward.

Trevor Scott, chief executive of RFK in Rugby, said: “This scheme was one of many instigated during the pandemic to help businesses to survive. It was very helpful, as it kept cash in the business that, certainly in the early days, was sorely needed. Realistically, for our industry at least, that time has passed, so we are happy to restart paying in line with the changes to the scheme.”

Richard Reynolds, chairman of CP Hart, suggested that surging customer demand should make paying the rates bill a little easier: “Of course, any reduction in support will put pressure on cash flow ­ but the lifting of lockdowns and surge in customer demand should make further support unnecessary.“

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Ian Coghill, a director of Riddle and Coghill in Edinburgh, was grateful for the help, but disparaging about what he believes he gets for his rates money: “Any assistance was helpful, as we were forced to close as an industry for a considerable time and are still being restricted by the current shortages of goods that the various governments have created due to the pandemic. Add to that the ludicrous road management schemes now making town centres even less attractive to visit and I don’t know what we are actually getting of value by paying rates to start with. You have to pay for parking and you can’t put a sign up without planning permission. Business rates aren’t value, they’re extortion.”

Darren Taylor, managing director of Searle and Taylor in Winchester, was also unimpressed with the iniquities of the rates system. He said: “The high street is in constant battle with online retailers. These online-only businesses rarely pay business rates. If they do, it’s at a much lower rate, as the set ‘rateable value’ will be lower on an out-of-town warehouse than on a high street.”

One KBB studio owner who preferred to remain anonymous commented: “We took full advantage of the business rates relief – and rightly so, given that it was the Government that prevented us from trading, causing us huge financial challenges as a result. The residual trade restrictions continue to have serious implications for our ability to trade and service the pent-up demand. In my opinion, the Government should have absolutely zero call on any business taxes for as long as they put obstacles in our way to free and open trade.”

Federation of Small Business national chair Mike Cherry echoed the BRC’s sentiments on business rates: “For too long the business rates system has been outdated and regressive, and the ongoing pandemic has only highlighted the need for serious reform in the months ahead. But over the past few months, many small firms have benefited from the retail, hospitality and leisure relief which has helped to ensure businesses don’t go under and jobs are saved.”

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