BRC flags urgency of fixing ‘broken’ business rates system

The UK government must take immediate action to reduce the burden placed on retailers by business rates, according to the BRC.

According its new report, based on a survey of retailers, this would help to “unlock the industry’s potential to support the economic recovery from the pandemic, ensuring that retail remains a provider of quality jobs and an important contributor to tax revenues for years to come.”

Key findings include: 83% retailers say it is ‘likely’, ‘very likely’ or ‘certain’ that they will close shops if the business rates burden is not reduced as a result of a Fundamental Review, which will report back this autumn; 85% say that business rates is an ‘extremely’ or ‘very important’ issue when opening or closing stores.

The BRC’s report recommends: Cutting the multiplier to its original rate of 35 pence in the pound (35%); Fixing the system of transitional relief, which cost retailers over £500 million between 2017 and 2020.

Introducing an ‘Improvement Relief’ to ensure that rates bills do not rise immediately as a result of investment in a property; Reforming the Valuation Office Agency to ensure accurate valuations and faster processing of appeals.

Helen Dickinson, Chief Executive at the BRC, says: “Given the retail industry contributes almost £100 billion to the economy (Gross Value Added) and employs over three million people spread across the country, it has a vital role in both the UK’s economic recovery and the government’s levelling up agenda.”

“This report underscores the urgency of fixing the broken business rates system, which currently hold back new jobs and investment. With one in seven shops currently shuttered, it is essential that action is taken, or else it will be our local communities and high streets which suffer the consequences.”

She adds: “The government needs to bring the burden down and take action to ensure that the system reflects property market values more quickly. This should include a cut in the multiplier rate, returning it to its original rate of 35%.”

“Furthermore, government should introduce an improvement relief to prevent stores being immediately punished for investment into their property. At a time when the green agenda is so important, it is madness that business rates should rise for a firm that adds solar panels to their property.”

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