LEGISLATION
BUSINESS RATES REFORM 2021 BUDGET
RATES REFORM NEEDED TO MAKE IT ‘FAIRER FOR PHYSICAL STORES’ ACS HAS JOINED A WHO’S WHO OF LEADING RETAILERS AND TRADE BODIES TO DEMAND REFORM OF
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THE BUSINESS RATES SYSTEM TO ENSURE PHYSICAL STORES AREN’T DISADVANTAGED COMPARED TO ONLINE RETAILERS.
n an open letter to Chancellor Rishi Sunak, published on Monday, 18 groups including ACS, BIRA, Usdaw, Tesco and Waterstones have called on the Government to make fundamental changes to the way that business rates are collected so that physical stores aren’t at a disadvantage compared to online retailers.
KEY RECOMMENDATIONS The letter makes the following specific recommendations: 1. Reducing the business rates multiplier: The multiplier has risen from 35% in 1990 to over 50% today. It should be significantly reduced, focusing on a level closer to the original rate of around 35% of the market rent. This would make the UK more competitive and show the Government is backing British shops. 2. Level the playing field on tax: Currently online retailers pay a lower proportion of tax per sale than bricks and mortar retailers. We urge the Government to rebalance the tax base to ensure online and bricks and mortar retailers pay a similar proportion of tax and we welcome the consideration of viable options in the Government’s ‘fundamental’ review.
The letter makes key recommendations around reducing the business rates multiplier and levelling the playing field on tax. In its own submission to the Treasury ahead of the Budget, ACS has echoed calls for wider reform and highlighted the need for additional short term reliefs to avoid a sudden shock of high rates bills in April this year. It noted that almost half of the convenience stores in the sector (42%) would have had to close without the financial support through rate relief, grants and loans provided by the Government over the last year. ACS Chief Executive James Lowman said: “It is essential that the Government balances the business rates system to ensure that physical retailers aren’t disadvantaged compared to their online only counterparts, and can invest in improving their stores without having to face higher business rates bills as a result. “In the coming months we will be approaching a critical time in the nation’s recovery from Covid-19. During this time, it’s crucial that local shops are given as much notice as possible to plan ahead so that they can continue to serve their communities. We are calling on the Government to reintroduce business rates gradually and not as a sudden shock that could put local shops, especially those on high streets and in town and city centres at risk.” ACS’ full submission to the Treasury ahead of the Budget on March 3rd is available here.
WEDNESDAY 10TH FEBRUARY 2021 / ISSUE 42 / SLRMAG.CO.UK / 13
