William Eichler 12 November 2019

Reform ‘broken’ business rates system, retailers say

Retailers are urging the next Government to reform the business rates system, which they argue penalises the retail sector by over £1bn every five years.

The British Retail Consortium (BRC) has published a ‘manifesto’, entitled A Vision for the UK Retail Industry, which sets out how the next Government should support the retail industry.

It calls on Whitehall to ease the business rates burden by scrapping the ‘downwards transition’. This is the method by which the tax on premises is corrected when the rates bill is incorrectly calculated.

The transitional nature of the ‘downwards transition’ means that a business’ tax bill is corrected only gradually rather than instantly, which leads to retailers paying more overall.

The BRC estimates that the ‘downwards transition’ costs retailers £1.3bn every half a decade.

The retail industry generates £17bn in business taxes and drives 5.1% productivity growth across the industry compared to just 0.5% in the UK as a whole.

It is also the largest private sector employer, with three million people directly employed in retail.

The BRC’s manifesto also called for reform of the Apprenticeship Levy to allow greater flexibility to spend on any form of accredited training.

Helen Dickinson, chief executive at the BRC said: ‘“A Vision for The UK Retail Industry” offers a path to empowering our shops, our shopworkers and our communities.

‘Political parties should grasp this chance for reform. The General Election is a unique opportunity to address many of the imbalances that are adversely affecting retailers. Imbalances that have led to job losses and store closures up and down the country.

‘Fixing the broken business rates system and reforming the Apprenticeship Levy would help unlock the necessary investment into skills, stores and online necessary to allow retail to thrive.’

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