Business rates review to support small businesses


by Sarah Blackman

Retail groups have welcomed the Government’s long-awaited pledge to review the punishing business rates system.

Chancellor George Osborne announced in his Autumn Statement on Wednesday that future increases in business rates would be capped and there would be a 50% increase in small property discount.


He said the review would be complete by the time of the 2016, which means that it must get underway immediately.

Questions still remain about exactly how radical any outcome might be, but British Independent Retail Association believes that engaging with the project is of “vital importance” to small businesses across the country. CEO Alan Hawkins commented: “The relief, discount and review are all evidence that the government knows there is a real problem to be solved. We will contribute strongly to the process of solving it.”

The British Retail Consortium (BRC) has been leasing the cross-industry debate about the future scope of change for business rates and said there is a strong consensus from retail that it needs a more fundamental reform because the existing system is no longer fit for purpose.

Commenting on the Chancellor’s announcement, BRC director Helen Dickinson said: "We very much welcome the commitment to undertake a comprehensive review of the business rates system. We want a system that brings investment and jobs to the high street without punishing retailers who trade online. The retail industry is the largest rates payer, contributing over a quarter of the total rates tax take.

"Today’s short term support package will be of enormous help to those struggling to keep their businesses open on the high street.”

Meanwhile, the CBI said the changes to business rates will be “a shot in the arm” for growing firms as they look towards 2015.

Director general John Gridland said: “We wanted to see action to tackle our clunky and outdated business rates system, so immediate help, by capping the increase and extending relief for small firms, coupled with a much-needed review, will be welcomed by businesses.”

But UK accountancy firm, Wilkins Kennedy, warned that reduced rates will not cure the high street, adding that the government mustn’t forget about the larger players.

According to the Office for National Statistics, small scale shops are actually leading growth on the high street, experiencing an 8.1% rise in sales since 2013, compared to a 2.6% rise from larger retail businesses, leaving a large gap in the overall customer share, the firm said.

Wilkins Kennedy Patner Phil Mullis commented: “Tailored customer service, local knowledge and specialist goods are all USPs for the independent retailer, giving them the growth they deserve during the recession. The Chancellor’s further rate relief announced today will only go further to help keep the wolf from the door."

“However, we mustn’t lose sight of the bigger retail stores who are large employers. The recession taught us that no one was safe, independent or national chain and the Government must do their bit at the other end of the scale to help the bigger players out too," he added.

“Also, we can’t ignore the fact that trade is increasingly moving online. So, whilst these rate reliefs are handy in the short term the growth won’t be sustainable if the footfall chooses the online shop over the bricks-and-mortar store."


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