// BRC reports highlights the need for Government to take immediate action on current business rates
// In 67% of store closures in the past two years, business rates had a material impact in the decision-making process
A new report published today by the British Retail Consortium (BRC) highlights the need for Government to take immediate action to reduce the burden placed on retailers by business rates.
According to the report, this would help to “unlock the industry’s potential to support the economic recovery from the pandemic, ensuring that retail remains a provider of quality jobs and an important contributor to tax revenues for years to come.”
The report, Retail, Rates and Recovery: How business rates reform can maximise retail’s role in levelling up, is based on a survey of leading retailers carried out by the BRC.
Retail accounts for over three million jobs spread across the UK and is responsible for over £400 billion in consumer spending a year.
The survey of retailers shows that unless business rates barriers are addressed, the Government will miss a key opportunity in supporting their ambitious levelling agenda.
The key findings from the survey are that 83 per cent of retailers say it is ‘likely’, ‘very likely’ or ‘certain’ that they will close shops if the business rates burden is not reduced as a result of the Fundamental Review.
That 85 per cent of retailers say that business rates is an ‘extremely’ or ‘very important’ issue for their businesses when opening or closing stores.
In two-thirds, of store closures in the past two years, business rates had a material impact in the decision-making process.
And that 25% per cent of stores paid more in business rates than in rents and given the multiplier of 51.2 per cent, the rates liability should be approximately half of the rent paid.
The report makes a number of essential recommendations aimed at encouraging investment and securing the viability of shops and high streets.
The Government also announced a Fundamental Review into business rates from last year, which will report back this autumn.
The stated aims of the review include “reducing]the overall rates burden on businesses”.
British Retail Consortium chief executive Helen Dickinson said: “Given the retail industry contributes almost £100bn to the economy (Gross Value Added) and employs over three million people spread across the country, it has a vital role in both the UK’s economic recovery and the Government’s levelling up agenda.
“This report underscores the urgency of fixing the broken business rates system, which currently hold back new jobs and investment. With one in seven shops currently shuttered, it is essential that action is taken, or else it will be our local communities and high streets which suffer the consequences.
“The Government needs to bring the burden down and take action to ensure that the system reflects property market values more quickly. This should include a cut in the multiplier rate, returning it to its original rate of 35%. Furthermore, Government should introduce an improvement relief to prevent stores being immediately punished for investment into their property. At a time when the Green agenda is so important, it is madness that business rates should rise for a firm that adds solar panels to their property.”