Call for rates clarity


The UK government must provide clarity on plans for business rates or risk accelerating the decline of the high street, according to Colliers International.

The government is currently considering changes to the system, with conclusions due in the Autumn.

John Webber, head of business rates, Colliers International, said: “Whether the government decides to extend the current  business rates holiday for another six or even 12 months from April 2021 or whether it gives 50% rates relief will be important factors to put into the decision making about keeping open or closing stores or cutting jobs. We ask the government not to leave this decision to next year or even the Autumn - or for many businesses the decision to stay open or close will have been made and the horse will well and truly have bolted.”

The group reported that, in non-Covid times, Business Rates provided the government with a net tax take of about £26bn, of which the Retail Sector is the largest single sector, paying between a quarter and a third (around £7.625m) of the total tax bill. This is even though the gross value added by retail to the national economy was less than 10% (ONS). Together with the hospitality sector, the tax contribution was around £10bn.

Webber said: “In many ways Covid-19 has been the catalyst for what we were seeing anyway. 2019 was the year of the retail and restaurant CVA and even before Covid-19 many of the weaknesses were apparent. The impact of too high business rates, increased employment costs and competition from on-line rivals were taking their toll. Coronavirus has only exaggerated this.”

Given the state of hardship being faced by both sectors, Webber believed it was inconceivable that retailers and restaurateurs would be able to take back their business rates commitments in the next 12 months. “Even “successful” retailers such as John Lewis would be facing annual rates bills of over £50m (not including Waitrose next year for a chain of fewer than 50 stores.

“We await the conclusions of the Business Rates Review in the Autumn with bated breath. Whether the government will finally recognise that a £26bn property tax is unsustainable waits to be seen.

“In the meantime, the Chancellor must give retailers and the hospitality sector some glimmers of hope- and reassure them that they won’t be facing exorbitant and unaffordable business rates bills as the economy tries to recover in the New Year.”