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Sunday 18 August 2019

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MPs call for retailer rates reductions

Written by Peter Walker
21/02/19

The Housing, Communities and Local Government Committee has warned that unless this urgent action is taken, further deterioration, loss of visitors and dereliction may lead to some high streets and town centres disappearing altogether.

Its report into saving the UK’s High Street by 2030 has therefore proposed a reduction in business rates for High Street retailers and a 12-month ‘holiday’ from rates increases which result from investments to improvements in property.

High street retailers are paying more than their fair share of tax, while online retailers are not contributing enough, the report stated, noting that Amazon UK’s business rates amounted to approximately 0.7 per cent of UK turnover, while High Street retailers are paying considerably more, with business rates as a proportion of turnover ranging from 1.5 to 6.5 per cent.

The government has announced the introduction of a Digital Services Tax in April 2020 to address issues related to historic avoidance of corporation tax. “However, this does not address the imbalance between online and high street retailers,” stated the committee, adding “The government needs to go further and move faster to level the playing field between online and High Street retailers.”

The committee recommended further funding for the government’s £675 million Future High Streets Fund, using revenue generated from reforms to business taxation.

“But the Future High Streets Fund is only one part of the solution,” the report read. “Local intervention, while essential, needs to be accompanied by further action by central government and at local level, as well as by retailers and landlords, to create the conditions for high streets and town centres to flourish in the future.”

In terms of recommendations for retailers, the committee stated they should make an asset of their physical retail space and their staff by creating opportunities to interact with customers that cannot be found online.

“In addition to being well-stocked with interesting products, this could include providing personal shopping services, advice and consultations, using social media and investing in staff training and the store itself,” the report explained.

in many places, store opening hours do not reflect the fact that many people need and want to be able to shop at the end of the day after they have left work, the committee pointed out.

“If they cannot shop on the high street at their convenience, they will shop online or at an out-of-town retail centre instead – retailers should conduct research with shoppers to find out whether their opening hours are meeting people’s needs and adjust them in accordance with the results on a local, shop-by-shop basis.”

Helen Dickinson, chief executive of the British Retail Consortium, stated: “We welcome the committee’s recommendations to mitigate the business rates burden through lower rates or investment relief.

"However, such relief must not result in increased costs to other retail activities - many well-known brands disappeared from our high street last year. Without a full and urgent review of business rates and business taxes, the government is sleepwalking into the demise of many of our local communities up and down the country."



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