Household names pressing both major parties to put issue on their priority listsBusiness rates are charged on commercial property such as shopsCharges have been described as unfit for the modern ageBy Emily Hawkins
Updated: 10:19, 6 January 2024
Dressed to impress: Laura Whitmore in her Love & Roses collection for Next
A host of leading shopkeepers are calling on politicians to finally act to fix the broken business rates system.
Household names including Next, House of Fraser and Currys are pressing both major parties to put the issue on their priority lists ahead of this year’s general election.
Business rates – which are charged on commercial property such as shops – have been described as unfit for the modern age while the increases on the horizon run the risk of sustaining inflation and hitting investment.
This week Next boss Lord Wolfson told the Daily Mail that it is ‘important the system rapidly reflects the reality of individual trading locations’ as rate charges in many places ‘are often out of kilter with rents’.
Ahead of an autumn election, Wolfson wants to see ‘the rates system more responsive to local trading conditions’ as opposed to taking ‘money off’.
Last month Marks & Spencer chief Stuart Machin told The Mail on Sunday that politicians neither ‘understand nor value’ British retail. In his Autumn Statement in November, Chancellor Jeremy Hunt announced larger retailers will see their business rates bill rise by 6.7 per cent, which was the rate of inflation in September. This means a £500m hike in rates from April.
Currys chief executive Alex Baldock described the hike as ‘very ill advised, to put it mildly’.
Scott Parsons, chief operating officer at shopping centre owner Unibail-Rodamco-Westfield, said rates were ‘the single biggest challenge’ faced by the industry.
Business rates are charged on shops, restaurants, pubs and other business properties based on their rental value. They make up a hefty proportion of many businesses’ annual costs.
Concern: Next boss Lord Wolfson
By comparison, critics of the system believe online retailers like Amazon do not pay their fair share of taxes on their warehouses.
As a result, retailers have long complained brick-and-mortar premises are penalised.
Nick Lakin, group director of corporate affairs at B&Q and Screwfix owner Kingfisher, called on the Government – and Labour should they be elected next year – to act urgently rather than launching a protracted review that would not make any conclusion for several years.
Currys boss Baldock has met with Shadow Chancellor Rachel Reeves to discuss the issue and believes Labour has been ‘doing a better job at reaching businesses’ than the Government.
Nick Mackenzie, boss of pub group Greene King, said ‘the increases in the cost of doing business threatens the future of the sector’.
Chris Wootton, at House of Fraser and Sports Direct owner Frasers Group, said he has had opened ministers’ eyes as to how ‘complicated’ the system is.
The British Retail Consortium’s boss Helen Dickinson accused Hunt of ‘letting the tax spiral out of control, driving up costs just as retailers’ efforts to curb inflation have started to bear fruit.’
A Treasury spokesman said: ‘We have taken one third of properties out of paying business rates altogether whilst protecting bills for over 1m business properties from inflation.’
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