01 May 19 by Rebecca Cook
We have seen that retailers are benefiting from a rates reduction for the next 2 years. Alongside this, the Government have been asked to urgently assess business rates and in particular look at creating either; a sales tax, increase VAT or create an online sales tax. The revenue raised from this would then be used to support the High Street in the following ways:
– a reduction in business rates for retailers in high streets and town centres;
– a 12-month holiday for high street retailers from rates increases, resulting from investments to improvements in property; and
– an increase in the funding available to local areas through the £675m Future High Streets Fund.
Another alternative would be to remove complex relief and exemptions, as well as abolishing transitional relief and instead lowering the UBR down 30p. Rebecca Cook from our Business Rates Consultancy team says “Business Rates are a major outgoing for all occupiers of commercial property. The burden of the current Business Rates system is damaging to the success of the high street as for many, the cost of doing business, often exceeds the profit, and which has led to significant retail store closures and the loss of over 100,000 jobs in the last 3 years”.
“Measures such as the move from RPI to CPI and the Retail Relief scheme announced in the Autumn 2018 budget were welcomed and it is encouraging that the Select Committee recognises the further need for reform”. Rebecca continues “however, many online retailers also have physical shops and a so called ‘green tax’ could be further damaging to the high street. The average Business Rate bill has risen by a fifth since 2010 due to compound inflation. Reducing the multiplier and abolishing transitional relief until the next revaluation, would ensure the high street receives the full and entitled reduction in Business Rates liability, whilst the Government works with the industry to reform the system and make it fit for purpose.”
Vickery Holman have offices in Truro, Plymouth, Exeter and Bristol with experts able to provide you with the advice you need to make the best decision for your property going forward. If you have a retail property and would like to discuss this article with a member of the team then please do not hesitate to contact us.