MPs from the influential Treasury Select Committee have urged the government to rethink business rates that currently “damage the competitiveness of shop on the high street”.
In a report sent to Chancellor Philip Hammond last week, the committee issued a stark warning that the current system weighs heavily in favour of retail parks and online businesses with properties away from then high street.
The report called on Hammond to “address the property taxation imbalance between businesses on the high street compared to those based on major out-of, or edge-of town, retail parks, and online businesses”.
This follows a month of disappointing Christmas trading updates for many high street retailers, ahead of a further hike in business rates set for April, where revenue from the tax is forecast to hit £30 billion for the first time.
Meanwhile, online retailers enjoyed further growth over Christmas, seeing a 9.4 per cent year-on-year increase.
Figures released from real estate advisory firm Altus Group last April also revealed that Amazon would see a £148,000 tax break from the altered business rates, while small shops would see a £3663 rise over the next five years.
“It is no surprise the profit warnings tended to be from those companies that predominantly have a high street presence, because they are paying a cost to their business that’s not borne by most of their online competition,” Argos chief executive John Rogers said.