Revo, the representative body for the UK retail property sector, has called on the government to “act swiftly and radically” in its promise to fundamentally review the business rates system.
Ahead of the upcoming budget on 11 March, Revo has written to the new chancellor Rishi Sunak asking for an acceleration of an assessment of the current “unfair and outdated” system, which “deters investment into the UK by global companies”
The body has called for:
- An internationally competitive rate of tax to be adjusted annually to reflect changing economic conditions
- Introduction of a digital sales tax to reduce the burden levied on physical business
- Investment in the business rates and appeals infrastructure – including new technology and extra staff
- Removal of downwards transitional phasing so that any benefit from revaluation reductions is immediate
Chief executive of Revo Ed Cooke said: “The government must deliver on its commitment to review the business rates system, and act swiftly and radically. Inevitably this should include considering a form of digital sales tax to allow for an immediate reduction in business rates, which at more than 50% is one of the least competitive corporate tax rates in the world.
“We call on the new chancellor to put in place a system that allows for the iniquitous downward transition policy to be abolished, which would signal meaningful support for retail businesses, particularly in areas where the conservative party was lent votes in last year’s general election.”
Revo also urged the government to explore an extension or expansion to the current Future High Streets Fund and the Towns Fund. The government has currently pledged £1bn under the Future High Streets Fund for towns to reinvent their offering.
Following Boris Johnson’s green light for HS2, Revo has proposed further investment in small-scale transport to improve connectivity between towns and cities other than London and its major counterparts.
The business rates tax is now one of the highest corporate taxes in the world having risen from 34% to 50% of rateable values since 1990. The retail sector contributes 24% of business rates, equating to about £7bn.
Last week 50 high street retailers including Debenhams chief executive Stefaan Vansteenkiste, New Look CEO Nigel Oddy, and Primark chief executive Paul Marchant wrote to the Chancellor calling for urgent action on business rates reform.
Frasers Group retrospectively backed the letter, coordinated by the BRC. In December, CEO Mike Ashley that further loss-making House of Fraser stores could close within months if the government fails to change the current business rates system.