Retailers demand Chancellor address ‘outdated Victorian taxation system’
Over 50 UK retailers, including Asda, Marks and Spencer, Sainsbury’s, Iceland and River Island, have called on the government to fix the business rates system.
A letter to the new Chancellor, Sajid Javid, coordinated by the British Retail Consortium, points out that retail remains the largest private sector employer in the UK, employing approximately three million people. The industry accounts for 5% of the UK economy, yet is burdened with 10% of all business taxes, and 25% of business rates.
It asks for four fixes: A freeze in the business rates multiplier; Fixing transitional relief, which currently forces many retailers to pay more than they should; Introducing an ‘Improvement Relief’ for ratepayers; Ensuring that the Valuation Office Agency is fully resourced to do its job.
The letter claims that implementation of these four recommendations “could be undertaken quickly, would reduce regional disparities, remove barriers to the proper working of market forces, incentivise economic investment, and cut away at least some of the bureaucracy of the current system.”
Richard Walker, Joint Managing Director, Iceland Foods, says: “Business rates are an outdated Victorian taxation system that have little relevance to our modern multi-channel retail economy. Fundamental reform of the system is the only way we will stem the decline of high street communities up and down the country."
“We welcome the BRC proposals which offer short term solutions that can introduced quickly and will have immediate benefits to the struggling retail sector. In particular, the removal of downwards transition will allow all retail businesses to pay a tax which more accurately reflects the value of their properties,” says Clive Lewis, Chairman at River Island.
“The burden that rates places on all High Street businesses not only stifles growth but is a major contributor to the closure of stores and the resulting decline in towns across the country.”