The British Independent Retailers Association (Bira) is calling on Chancellor Philip Hammond (pictured) to revise business rates to save the UK high street.
This week’s Budget will be the last one to take place in spring and is expected to reveal extra money to help firms facing steep increases in business rates.
The long-delayed revaluation will come into effect on April 1, with Bira pointing out that it is coming at the “worst possible time”, as businesses face uncertainty over Brexit, the National Living Wage and the depreciation of the pound.
Currently, retail businesses pay 22% of all rates collected but only contribute 5% of the UK’s gross value added (GVA) – the measure of the value of goods and services produced in the sector. Bira agrued that this highlights a huge imbalance.
Bira has outlined a three-point plan to Government, asking it to take immediate action on business rates.
Its recommendations include:
- Government to issue an immediate retail-specific business rate relief of £1,500, as seen in Wales. Bira believes that the £12,000 threshold is too low, and a relief of £1,500 would give an immediate relief, matching what Government have done for the past two years while something more radical is debated.
- Change the £12,000 threshold to a £12,000 allowance, for all retail businesses. Prior to this revaluation, the average retail rate was £27,290. A cut-off at £12,000 and a small amount of taper to £15,000, doesn’t help the majority of small retail businesses. This would redress the current imbalance and benefit smaller retail businesses with a reduction in their bill, which could be the difference between closing or surviving in 2017 and beyond.
- A fundamental reform of the rating system creating a completely new and fair rating structure for modern retailing. A fundamental review was promised by the last Chancellor in 2014.
Bira chief executive Alan Hawkins said: “In 2014, the Chancellor announced a full structural review of business rates. All that has happened is a change to the appeals system and sticking plasters to the antiquated and unfair structure. We need fundamental reform and quick. The Government have clearly stated their support of the Great British high street in these tumultuous times, but now they have to demonstrate it, and Philip Hammond needs to listen in advance of the Budget.
“Small retail businesses are already paying more on the high street than their larger competitors. Our research found that for every £1 per square metre on the high street, a multiple retailer pays 41p. Giving all retail businesses £12,000 off their business rates, would give small businesses a reduction in their bill, which could be the difference between closing or surviving the already difficult trading situation they find themselves in.
“A retail-specific rates relief – as actioned by the Welsh Assembly – would be a quick fix to help thousands of retailers who have been negatively affected by the revaluation, but we believe a full reform is needed to redress the balance and create a fairer system for all.”