Chancellor faces fresh anger over ‘unsustainable’ business rates burden as 50 of Britain’s top shop chains call for shake-up
More than 50 of Britain’s biggest shop chains are calling for a shake-up of business rates after being saddled with an extra bill of over £500million in the last three years.
In a letter to Chancellor Sajid Javid ahead of the Budget next month, they warned that the ‘burden of business rates has become unsustainable’.
The letter, whose 52 signatories include the bosses of Marks and Spencer, Sainsbury’s, Dixons Carphone and Greggs, added: ‘The business rates system is broken, and fundamental reform is needed.’
Chancellor Sajid Javid has been warned current business rates are unsustainable and that the system needs ‘fundamental reform’
Retailers say a mechanism that allows businesses to move slowly to their new rates bill unfairly affects the High Street and areas outside London.
This is because ‘transitional relief’ staggers the speed at which those facing higher bills see their bills go up – and funds this by slowing down the speed at which bills fall for those who are due a reduction.
The British Retail Consortium (BRC) said retailers have subsidised other industries to the tune of £543million over the last three years, while firms outside London have subsidised those in the capital in the sum of £596million.
Helen Dickinson, chief executive of the BRC, said ‘northern high streets effectively subsidise London banks’.
The rates system has been attacked by MPs and businesses amid fears it is putting shops under incredible strain, with some businesses spending more on rates than on rent.
Last year was the High Street’s worst for 25 years, and 61 shops shut their doors for good every day.
Eric Mazillier, boss of Decathlon UK, said: ‘Fixing the complex transitional relief scheme would be a good start.’
Nick Lakin, corporate affairs director at Kingfisher, said: ‘The system too complex and it does not reflect modern retail.’
The Government has offered a temporary reprieve for small businesses, cinemas and music venues, but so far has only promised a review of the wider rates system.