Retail experts have delivered a mixed response to the news there will be a full review of the structure of business rates and a 2% cap on the inflation-linked increase of the tax next year, as revealed in Chancellor George Osborne’s Autumn Statement today.
Helen Dickinson, director general of the British Retail Consortium:
“We very much welcome the commitment to undertake a comprehensive review of the business rates system. We want a system that brings investment and jobs to the high street without punishing retailers who trade online. The retail industry is the largest rates payer, contributing over a quarter of the total rates tax take. Today’s short term support package will be of enormous help to those struggling to keep their businesses open on the high street.”
Neil Stockham, retail tax partner at accountancy organisation BDO LLP:
“The business rates review announced in the Autumn Statement is long overdue - the rates multiplier currently uses 2008 property values and takes no account of the post recessionary fall in property prices in many areas. However, the chancellor has given no indication of when such a review will happen and this will disappoint many retailers, especially those in the mid-market who fail to benefit from the changes in the same way that smaller retailers will. The 2% cap will help but will not come into effect until April and with inflation currently running above1% it will not provide a significant economic benefit to most.”
Phil Orford, Chief executive at the Forum of Private Business:
“Business rates have been an ongoing concern for a large number of our members, with 55% in a recent poll seeing this significant barrier to business growth. It is good to see that the Chancellor has agreed with our suggestions of short term measures to reduce the pain of excessive property taxation with continued a continued cap of 2%, a £1,500 discount for retail properties and an extension on Small Business Rates Relief.”
Edward Cooke, director of policy and public affairs at the British Council of Shopping Centres:
“At last, some sense of a commitment to review the structural inadequacies of the business rates system. The devil will be in the detail of course, but we’ll be working closely with Treasury Ministers and officials to make sure we get a fair deal for retail and retail property companies. It’s such a pleasure to see that the Chancellor is listening to an industry whose employment numbers are a huge contributor to the figures he’s rightly proud of, and an investor community that can have such a positive social and economic impact on towns and cities across the UK. Now for the hard bit; delivering on that promise.”
Liz Peace, chief executive of the British Property Federation:
“Basing a property tax on nine-year-old valuations is simply unfair and inefficient and other countries have shown that with the use of technology you can design a far more responsive system. The compounding effect of annual RPI increases is also meaning that a higher proportion of taxation each year is coming from business rates, sucking the blood from our high streets and eroding many other businesses’ competitive edge.
Dan Simms, head of retail agency (south) for property agent Colliers International:
“Retailers will have not been expecting any real help on the business rates burden. Nevertheless, the announcement of a vague review of the rates system will be a depressing continuation of the ongoing and ever increasing pain that many retailers are experiencing, particularly in the areas that can cope the least - the North, Midlands and South West.”
Retail commentator Paul Turner-Mitchell said:
“It is all too easy to make a promise to review it and certainly a real headline grab given the level of discontent. The Government has already consulted on reforms to the business rates appeal process early this year which were meant to be implemented in October yet were kicked into the long grass after objection by business. Review must be followed by meaningful reform.”