Shopping centre body Revo has warned that the government must reform business rates to reflect economic conditions and maintain the UK’s international attractiveness after “unjustifiable” rates rises came into effect yesterday.
The changes make this the first time that the tax has risen above 50% of rateable value.
Revo argued that the new increase “ignores structural changes in modern retail and the mounting financial pressures on the retail sector, which supports three million UK jobs”, in a submission it made to the Treasury Select Committee Inquiry on business rates today.
The submission calls for an immediate review of the business rates system, including the reduction of the business rates multiplier, and a move to annual revaluations to maintain a better balance with the market.
It also called for the committee to consider the role of online taxation and recalibration of the system to share the burden on different businesses.
Ed Cooke, chief executive of Revo, said: “It is serendipitous that the Treasury Select Committee Inquiry takes evidence just as the business rates tax rate breaches the 50% threshold for the first time, which is clearly unsustainable, globally uncompetitive and frankly unjustifiable given the structural changes in the market and wider economic conditions.
“The system is archaic and completely out of step with how retailers trade across digital and physical channels today. Immediate action is needed to mitigate further retail failures and job losses. We hope the outcome of this inquiry will be an acknowledgement from government that this form of taxation is unsustainable, deters much needed investment in the physical fabric of our towns and cities, and must be reformed with a system that takes account of how retail business models are evolving.”