Business rates need urgent fix, Chancellor Jeremy Hunt told
Business rate reforms are ‘a long way’ from what High Street has been promised, the country’s largest retailers warn
- Bosses toss around tax tweaks, leaving brick-and-mortar stores with a heavy tax burden
- Critics say the system unfairly penalizes those present in city centers
- Online players face lower bills
Business rate reforms are ‘a long way from’ what the High Street has been promised, the country’s biggest retailers have warned.
Bosses of Marks & Spencer, Sainsbury’s and Currys rejected adjustments to the tax, leaving physical stores still facing a high tax burden.
Business rates are calculated on the basis of the rental value of shops, cafés and other business premises.
Critics say the system unfairly penalizes people with a physical presence in city centers, while lowering bills for online players.
The government had promised a “fundamental” review, but retailers said the changes so far are insufficient and warned the tax still “constraints local economies.”
Plea: Business rates urgently need a fix, Chancellor Jeremy Hunt has been told
M&S chief Stuart Machin said retail accounts for just over 5 percent of the economy, but pay nearly a quarter of business rates, stifling investment and driving up prices.
Machin, 52, said the levy “cannot go ahead” as it is, adding: “We welcomed the government tariff freeze and the ending of the downward transition last year, but it is time they take decisive action to protect retail, create jobs, bring back customers and support communities.”
Alex Baldock, who runs Currys, said: ‘The system is outdated and punitive, and change is needed to keep pace with a modern retail environment. We would like to see the government deliver on its promise of fundamental reforms.’
He added that while recent changes are welcome, “there is still a long way to go.” The changes include the removal of a transitional period during which companies can benefit from lower bills and more frequent revaluations.
And Chancellor Jeremy Hunt was lauded last year for handing businesses £13.6bn in support for corporate tariffs.
The British Retail Consortium said they were ‘essential steps’ but described them as ‘a long way from’ the Conservatives’ 2019 pledge.
Chief Helen Dickinson said: “The broken business rate system is a drag on investment, jobs and city centers.”
Blathnaid Bergin, Sainsbury’s finance boss, said any change that would help lower corporate rate bills would bring lower prices and higher wages.
The government said it has supported “generous” business tariffs, while its reforms have helped level the playing field between brick-and-mortar stores and online retail.