The British Independent Retailers Association (bira) has put forward a three-point solution to help save retailers from crippling under the looming rise in business rates.
From April 1, business premises will be revalued, with rates fluctuating depending on these new evaluations – so in any area where property values have increases, businesses will pay more tax.
Businesses with a property with a rateable value of £12,000 and below will receive 100% relief, but bira believes this threshold is too low.
“The long-delayed revaluation coming into effect on April 1 threatens the future of thousands of small retail businesses across the UK,” the retail association warned.
“This comes at the worst possible time with business uncertainty due to Brexit, National Living Wage and the depreciation of the pound, all affecting small retail businesses.”
bira is offering Chancellor of the Exchequer Philip Hammond a three-point plan solution to help the high street and create a system fit for modern retailing.
The three points are:
1. The government should issue an immediate retail-specific business rate relief of £1,500 as seen in Wales. bira believes that the £12,000 threshold is too low, and a relief of £1,500 would give an immediate relief, matching what Government has done for the past two years whilst something more radical is debated.
2. Change the £12,000 threshold to a £12,000 allowance, for all retail businesses. Prior to this revaluation, the average retail rate was £27,290, according to research from Jones Lang LaSalle. This would redress the current imbalance and benefit smaller retail businesses with a reduction in their bill, which could be the difference between closing or surviving in 2017 and beyond.
3. A fundamental reform of the rating system creating a completely new and fair rating structure for modern retailing. A fundamental review was promised by the last Chancellor in 2014.
Alan Hawkins, CEO at bira commented: “The Government have clearly stated their support of the Great British high street in these tumultuous times, but now they have to demonstrate it and Phillip Hammond needs to listen in advance of the Budget.
“Small retail businesses are already paying more on the high street than their larger competitors. Our research found that for every £1 per square metre on the high street, a multiple retailer pays 41p. Giving all retail businesses £12,000 off their business rates, would give small businesses a reduction in their bill, which could be the difference between closing or surviving the already difficult trading situation they find themselves in.
“A retail specific rates relief, as actioned by the Welsh Assembly would be a quick fix to help thousands of retailers who have been negatively affected by the revaluation, but we believe it is full reform is what is needed to redress the balance and create a fairer system for all.”
Story by Sarah Clarke.