Don’t let us lose the High Street
The British Retail Council is putting pressure on the Government to prioritise a major overhaul of the business rates tax system to avoid the closure of thousands of UK shops within the next 18 months.
A comprehensive study of the tax claims that 80,000 shops could close by 2017 if the system isn’t reviewed, affecting as many as 800,000 workers and decimating high streets across the country.
Andrew Hulbert of Harris Lamb’s Rating department said: “The BRC’s findings are based on retailers not renewing their leases on 60% of high street stores that will see their rental agreement expire by 2017, which means that to avoid that, thereby safeguarding the high street, action needs to be taken as a matter of priority.
The reason so many leases’ expiration is looming is the result of a raft of 25-year agreements struck in the 1980s and 1990s as retailers expanded at phenomenal rate, but it is set to bring the controversial debate about business rates to a head once and for all, as retailers have the option of voting with their feet and refusing to extend their rental agreement on the grounds that they feel they are being unfairly punished as the Government tries to increase revenue.”
Chancellor George Osborne announced the review into the tax in last year’s Autumn Statement and promised to deliver its finding by the 2016 Budget. Meanwhile, business rates are estimated to bring in £28bn for the Treasury this year, and the BRC is calling upon Mr Osborne to introduce tax relief and scrap inflation-linked releases to lessen the burden.
Andrew added: “The BRC is also advising that valuations of property are carried out every three years instead of every five, as the market is fairly transient and those figures can have a huge bearing on business owners.
“The organisation is certainly talking a lot of sense, and is accurate when it claims that business rates are a tax in jobs and growth. The retail sector has gone through a massive period of uncertainty in the last decade as the impact of the recession, subsequent price wars and the explosion of internet shopping have taken their toll. “
Let’s hope that the BRC and the Government can work together to reach a compromise whereby our high streets aren’t decimated and jobs are not lost as a result.
Harris Lamb’s Business Rating team can work with retail clients to calculate current tax rates and advise where additional savings can be made. For more information, contact Andrew Hulbert at Andrew.Hulbert@harrislamb.com