Shops in England outside of London would have paid £233m less in business rates in 2015/16 if the Government had not postponed a revaluation this year, the Grimsey Review has revealed.
Research, carried out by commercial property firm Colliers International, showed that shop rents had fallen on average by 20.6 per cent since the last revaluation in 2008. The former chief executive of Wickes and Iceland, Bill Grimsey, whose alternative review of the high street called for the urgent reinstatement of the revaluation, said this proved beyond doubt that shops outside of London were being over-taxed.
“Small businesses all over the country have been through the fire in recent years and the sight of 40,000 empty shops is testament to that,” he said. “Our high streets need radical surgery and the Chancellor is looking at throwing them a sticking plaster, offering a smaller increase in business rates than planned. “Unless the Chancellor addresses the consequences of postponing a much-needed revaluation of business rates or long overdue reform then the Autumn Statement will not amount to much. This Government has made an unfair system worse and has left shops all over the country with artificially high bills as a result.”
Small business owner Paul Turner Mitchell, a member of the Grimsey team, who used the Colliers research to show the business rates reductions that would have resulted under a revaluation, said any announcement by the Chancellor was meaningless until the system was returned to a level playing field.
“Business rates are so out of touch with property values that it is meaningless potentially offering a 2 per cent rise,” he said. “Small businesses all over the country know the system is no longer fair and they want to see reform and a revaluation so that it can be seen as a fair tax. A freeze is a minimum until that is achieved.”
He added that a 2 per cent capped increase would still see an increase in business rates taxation of £525.94million of which £122.76million would be paid by bricks and mortar retail.
“If George Osborne’s answer is that instead of hitting you over the head with a sledgehammer he’ll hit you with a lump hammer, I don’t think there will be much to celebrate about a £500million increase in business rates,” he said.