Business rates: Retail associations react

The government’s decision to scrap the business rates discount will come as a huge blow to the high street, British retail associations have said.

Chancellor George Osborne announced in his Autumn Statement yesterday that he will extend the small business rate relief scheme for another year.

Until March 2016, businesses with only one property with a rateable value of less than £12,000 could get 100% rate relief.

This will now last until March 2017 as opposed to gradually decreasing from 100% to 0% for properties with a rateable value between £6,001 and £12,000 as planned.

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However, the high street retail discount – currently worth up to £1500 a year to shops, cafes, pubs and restaurants – has not been renewed.

Alan Hawkins, CEO of the British Independent Retail Association said the news will hurt high street as early as April next year, adding: “Small shops will see bills rise even higher than they already would have as the rates multiplier will increase then as well.

"Make no mistake, high street pain is not over, vacancy rates are still more than twice pre-crash levels and more small shops are now closing than are opening. The Chancellor must make sure that the next rabbit he pulls out of the hat is real, positive, long term reform of this crippling tax. It would help if he also reinstated the £1,500 discount in the budget."

The British Retail Consortium (BRC) welcomed the extension of the business rates review, but warned that the Chancellor’s Autumn Statement will only have a minimum positive impact on the retail industry.

It said last July’s budget is still “holding back retail” from helping the government to deliver a more productive economy because of the need to mitigate the increasing costs placed directly onto retailers by the government – business rates, the national living wage and the apprenticeship levy.

The BRC’s analysis shows that these three measures represent approximately £14 billion of potential costs to UK retail businesses over five years.

BRC director general Helen Dickinson, said: "The chancellor needs to reduce the disproportionate burden of business rates on the industry and keep going with its review because this is the key to delivering the core of the government’s reform programme. While we eagerly await the detail behind the plans to devolve rates to local authorities over the next few years it is clear that devolution does not address the key problems of the rates system.

"The government is absolutely right to want to increase the number of apprenticeships but in doing so it must make sure the quality is increased too. We welcome the decision to establish a new employer-led body to set the standards and ensure quality.”

Dickinson continued: "If left untouched the burdens on business will weigh the retail industry down. We are making a huge contribution to increasing wages and providing training and jobs. If retail is to do this successfully and not lose jobs in the future the government will have to go beyond the devolution of business rates and deliver fundamental reform of the system early next year."



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