Retailers could face a 60% business rate by 2022 unless the government significantly changes the system, two property trade bodies have warned.
In a joint response to the government’s review of business rates, the British Property Federation and British Council of Shopping Centres cite research by a number of rating surveyors, which suggests the business rates multiplier that will apply after the 2017 revaluation will represent a tax rate of over 50%, which is likely to increase to nearly 60% by 2022.
The multiplier, which determines how high the business rates bill will be before any relief or discounts are deducted, is currently set at 49.3%.
The BPF and BCSC said such a high tax rate could discourage investment in real estate, particularly in more marginal locations. “This would deprive small and growing companies of the space they need in order to thrive, ultimately stunting new job creation,” they said.
They call for the introduction of a fixed business rates multiplier rather one determined by the Retail Price Index, as well as more frequent revaluations and reintroducing a relief for empty property rates.
They also recommend a series of administrative changes to increase the predictability and transparency of the system in the short term.