Recommendations to halt business rates rises04 April 2019
Revo, which represents all stakeholders in the £360 billion retail property sector, has warned that Government must reform business rates to reflect economic conditions and to make the UK internationally competitive, as changes effective from 1 April, take the tax above 50% of Rateable Value for the first time.
Business rates are pegged to a commercial property’s value and calculated using a multiplier which increases annually by inflation. Retailers expect to face a collective increase of over £180 million as a result of the latest 2.4% inflation (CPI at 1 September 2018) despite reported reliefs.
Revo, in its response to the Treasury Select Committee inquiry into business rates, argues that the increase in the tax, from less than 35% of Rateable Value in 1990 to more than 50% today, ignores structural changes in modern retail and the mounting financial pressures on the retail sector, which supports 3 million UK jobs.
In its submission Revo calls for immediate action from Government to mitigate any further distress on the high street, namely:
- Reduce the burden by lowering (or at minimum freeze) the business rates multiplier (UBR)
- Remove downwards transitional phasing so that any benefit from a fall in rates is fairly and instantly felt
- Move to annual revaluations (and ensure the AVD is closer to implementation) to better align changes in the market with rates payable
- Immediately commence a full, holistic review of the business rates system
Revo also calls for a fundamental re-think of how value is captured from the retail sector in order to make town centres and retail places sustainable in the long-term and to ensure the UK remains competitive on the global stage. Revo has offered to support Government in order to:
- Reform the rates system to reduce the overall burden paid by businesses to a fair and sustainable level
- Create a system which responds to economic circumstances and is internationally competitive
- Consider the role of online in taxation to reflect where wealth is created in modern retail
Ed Cooke, Chief Executive of Revo, said: “It is serendipitous that the Treasury Select Committee Inquiry takes evidence just as the business rates tax rate breaches the 50% threshold for the first time, which is clearly unsustainable, globally uncompetitive and frankly unjustifiable given the structural changes in the market and wider economic conditions.
“The system is archaic and completely out of step with how retailers trade across digital and physical channels today. Immediate action is needed to mitigate further retail failures and job losses. We hope the outcome of this Inquiry will be an acknowledgement from Government that this form of taxation is unsustainable, deters much needed investment in the physical fabric of our towns and cities, and must be reformed with a system that takes account of how retail business models are evolving.”
For more details or a copy of the submission contact firstname.lastname@example.org