The Booksellers Association has joined forces with more than 50 UK retailers to demand changes to the business rates system in a bid to save the high street.
In an open letter, coordinated by the British Retail Consortium, the retailers call on Boris Johnson's new government to put business rates at the heart of his economic policy as "the likelihood of a no-deal Brexit appears to be increasing" putting increasing strain on the retail sector.
Addressed to new Chancellor Sajid Javid, the letter proposes its own economic four-point plan and calls for a freeze in the business rates multiplier; a fix in transitional relief, which currently forces many retailers to pay more than they should; the introduction of an ‘Improvement Relief’ for ratepayers and calls for the government to ensure that the Valuation Office Agency is fully resourced to do its job.
BA m.d. Meryl Halls said: “There is no hiding from the fact that the UK’s high street is under serious threat. With a business rates system gravely in need of reform, we sincerely hope that the new Chancellor will take heed of the retail sector’s united call for urgent change, and will take decisive action to overhaul this outdated system.”
The heads of W H Smith, Boots, John Lewis Partnership, Sainsbury’s, Specsavers and Superdrug also signed the letter that highlights that retailers account for 5% of the economy and pay 25% of all business rates and calls for a wholesale review of business taxes to "create a tax regime fit for the 21st century".
The letter adds: "Elements of the system, which relies on a mishmash of reliefs that do not denote a successful and well-operating tax, are creating a situation where market forces are not being allowed to work properly and are resulting in serious negative distortions in the transformation of this industry. The effect on many high streets and town centres has been dramatic – retail unit vacancy rates have risen to 10.3%, a four-and-a-half-year high, with many of those units having been empty for over two years. Business rates often represent the tipping point between opening a new store or a store’s viability and its closure, with obvious consequences for employment and high street vitality, particularly in the most vulnerable, economically deprived locations."
A long-running bone of contention for the book trade with Amazon coming under fire and trade figures calling for an overhaul of the system, former Chancellor Philip Hammond confirmed a two-year tax cut to business rates of one third for all retailers in England with a rateable value of £51,000 or less in October 2018 with the next re-evaluation of rateable values scheduled for 2021.
The BA has long urged the government to "level the playing field" and reform business rates. Halls, John Lewis partnership group property and development director Chris Harris and Boots UK chief executive Sebastian James appeared before the Treasury Select Committee, chaired by MP Nicky Morgan, as part of the Committee’s Consultation on the Impact of Business Rates, in May. Halls warned the current system is "unfit for purpose" and stressed the current rates system does not help regeneration on the High Street.
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