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Retailers rail against business rates regime

Independent fashion retailers are staging a fightback against the “bitter pill” of business rates following the rating revaluations that took place earlier this year. 

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Some independents have experienced rises of nearly 90% since April’s revaluation.

Rigby & Mac, which employs 35 people across three stores in south-east London – The Dulwich Trader, Ed and Tomlinsons – and an office and warehouse space, has been faced with an average increase in business rates of 87% across the four sites.

Owner Dan Rigby has teamed up with other businesses in the area to form an action group to protest against the increases.

The group held its second meeting this week and is in the process of formalising its aims and objectives, which could include long-term reform of the business rates system and finding additional relief for small businesses in the short term.

“It feels like there was a swell of interest when it [the revaluation] was first announced, but it’s gone off the boil since then,” he explained of the decision to form the group. “The worry is that this next period of government will be entirely focused on Brexit and other important issues including business rates will fall by the wayside.”

He added: “We have independently challenged our increase, but the council is unable to assist.”

Similarly, Claire Mclennan and Tracey Davies, owners of The Square in Monmouth, South Wales, have lodged complaints with their local council about the increases and requested clarity on what rates relief is available – so far, to no avail.

They are supporting a campaign run by a local bookshop owner, who has organised a series of protests and sent a signed petition to local councillors, their MP and the Valuation Office Agency (VOA).

Mclennan said: “We were notified of our new valuation by the VOA just before Christmas and it is an extra £400 per month. The issue we have is the lack of consistency of the valuations in our small town. Independent businesses appear to have been targeted and the multinational chains seem relatively unaffected or have been given small rises. The inequality is a bitter pill to swallow.”

A spokesman for the VOA said:“We use a wide range of property information, including rental and other evidence, to compare values across similar types of properties in order to set the rateable value. 

“Regular business rates revaluations make sure each business pays its fair contribution by ensuring that the share of the national rates bill paid by any one business reflects changes over time in the value of its property relative to others.”

Large retailers are also struggling with the price increases. On London’s Bond Street, Oxford Street and Regent Street, business rates have risen by an average of 80% over the seven years to 2017 while trading for the same period has gone up by 30%. 

“The increase in business rates in the West End does not reflect the increase in trading for retailers,” said Jace Tyrell, chief executive of the New West End Company, which represents businesses and landlords in the area. 

“As a result of the mismatch the system isn’t fit for purpose any more. It was invented in the 19th century but, this is the 21st century with the internet and online shopping: business rates need a review.”

The managing director of one womenswear multiple agreed: “It’s impacted us hugely. Business rates were never fair in the first place but we’ve ended up with significant increases following this review. The new process means we could wait two years to get rebates. It’s a complete and utter disaster.”

 

 

 

 

 

 

 

Readers' comments (2)

  • The current system is not fit for purpose. High street retail is no longer the cash cow for government it once was. With the increased competition from online trading, we need a new system that treats every business fairly. Business rates are expensive to collect and calculate ], time they were destined to the history books and replaced with a modern business taxation system fit for the 21st Century that will tax all business fairly.

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  • darren hoggett

    To balance this report out slightly, we are in a lower secondary/tertiary area which had low business rates. Since the review, the rateable value is low enough so no business rates are charged at all. So the review has helped small businesses.

    Retailers always have a choice. They can either stay in the areas which charge higher rates and adjust their business model accordingly, or move to areas which change much lower or as in our case, no rates at at all.

    I fail to see how the endless moaning about business rates is going to change anything. Adapt your business. You don't have to be in 'so-called' position A, B or even C to be successful. If retailers do not move on, then neither will their landlords...

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