The British Independent Retailers Association (Bira) has launched a business rates manifesto, in an attempt to shift the government’s approach to the tax.
The manifesto, which was unveiled at the House of Commons on 11 September, proposes the introduction of a rateable allowance for small businesses of £12,000 per property, which would aim to alleviate the burden of business rates on smaller businesses.
Introducing the proposal, Bira chief executive Alan Hawkins stressed the urgency of finding a simple, swift solution to the issue that has dogged the independents sector: “Without help, there will be no medium or long term in which to have these discussions.”
The proposed allowance would operate in a similar way to the personal tax allowance. Small businesses – classed as those with a rateable value below £51,000 – would be able to receive a £12,000 allowance on their calculated business rates. The allowance would then taper over the £51,000 threshold.
Currently, businesses with a rateable value of £12,000 or under are eligible for business rates relief, with a taper up to £15,000. Hawkins said the proposed allowance would prevent a “cliff edge” for retailers suddenly facing huge rates increases.
Bira estimates that the average rateable value for its members’ stores is at least £20,000 – well above the level that qualifies for help.
Sir Geoffrey Clifton-Brown, MP for The Cotswolds, who hosted the launch at the Houses of Parliament, said the allowance offered a “pro-business, pragmatic solution” and would “simplify the tax system and cut the tax paid by small retailers.”
In addition to providing relief, the proposals aim to go some way towards levelling the playing field between online businesses and high street shops, to give small bricks-and-mortar retailers more opportunity to thrive.
Hawkins noted that the current imbalance would only speed up the shift to online: “If you have a non-cyclical, unfair property tax that singles out one sector how can you say that habits are not being pushed rather than evolving.”
Surinder Josan, national president of Bira, also stressed the importance of encouraging change in order to promote entrepreneurial spirit in the independent sector: “The business environment is counterintuitive to those that suggest that the high street needs to change and evolve to survive. The maths just isn’t there. We need to encourage an entrepreneurial environment.”
Bira has presented the proposals to the Treasury and is currently working on impact studies concerning the details of the project. Sir Clifton-Brown committed to calling a debate on the issue in the House of Commons, while Baron Lord Naseby, who also attended the event, promised to submit the question of business rates in the House of Lords.