The British Retail Consortium (BRC) has submitted a report to Chancellor of the Exchequer, Philip Hammond, ahead of the autumn Budget on October 29, requesting action on business rates rising again in order to help future-proof retail in such difficult trading conditions.
Tomorrow’s announcement of the latest consumer price index figures will lead to another significant increase in business rates from April 2019. The impact on the retail industry will be considerable, increasing the overall business rates bill by nearly £200m.
The report calls for a freeze to the business rates multiplier for two years until the 2021 revaluation. After which, three-yearly revaluations will be undertaken. The BRC says action is needed now and a freeze is the very least the industry requires.
Helen Dickinson BRC CEO says: “Retailers need the forthcoming Budget to reduce the cost burden on businesses. The business taxation system is in urgent need of reform. If the Government is to follow through on its commitment to ‘back business’ they cannot penalise retailers for investing in our high streets or dis-incentivise them from investing in new technology to meet the challenge of changing shopping habits. We need a fundamental reform of the business taxation system to make it fit for a modern retail industry operating in the 21st century.”
Over the last five years retailers have invested £1bn in new technologies, while average profitability across the industry has almost halved. Many businesses will struggle to absorb further increased costs.
The business rates bill is having a dramatic effect. Since 2015 there have been 3,200 store closures, and over 50,000 job losses. Worse, it is hindering the successful reinvention of high streets as it is a cost that few start-up businesses are able to bear.