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Business rates cuts to help independent retailers

Business rates bills will be cut by a third for almost half a million small retailers in the budget today.

The chancellor is expected to announce the cuts for 496,000 small businesses, along with £900m of immediate relief, in a bid to help the country’s failing high streets and small business owners.

A £650m transformation fund for high streets, including the improvement of infrastructure and transport, is also expected to be announced as part of the efforts to resurrect the UK’s high streets.

Another predicted budget reform is a review of relaxing town planning rules, in an effort to ease the conversion of under-used retail units.

Experts, however, are still fearful that these measures will not be enough.

Chief executive of the British Retail Consortium Helen Dickinson OBE said: “Struggling high streets require a broader outlook in order to thrive, particularly given the majority of the UK’s 3.1 million retail workers are employed in businesses that will not benefit from this announcement.”

She added: “The underlying issue remains that the business rates burden is simply too high and this unsustainable system needs less tinkering and more wholesale reform within the context of the wider taxation system.”

Although Head of UK business rates at real estate advisor Altus Group Robert Hayton said the announcement “will almost certainly make trading on the high street more attractive through lower rates and will offer some respite to smaller premises”, he was still concerned about the funding’s effect on struggling larger businesses.

He said: “Larger premises already pay £626 million a year extra in rates contributing to the existing small business rates relief scheme through a supplement of 1.3p on the standard tax rate and, unless this commitment is funded by way of a new digital services tax or through central funds, I’m concerned the burden may simply be transferred onto medium and large businesses, increasing their rates liabilities even further, which would be counterproductive at a time when major retailers are reducing their store portfolios and headcounts.”

 

Readers' comments (6)

  • Dear Chancellor
    Eliminate business rates. Raise VAT.
    Be bold.
    Love
    The High Street

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  • No government can 'save' the High Street. Let it evolve as it has done over centuries.

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  • Reasonable argument, Mr/s Anonymous. However the antiquated business rates system distorts the market with significant employment and social implications, preventing the natural evolution that you favour.

    Or are you supporting the argument that business rates should be eliminated in order to enable evolution?

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  • Any increasing of the Rate Threshold will ultimately at best be negligible and could actually have a negative effect as it allows businesses to be more inefficient than they may already be.

    No government can force consumers to travel to the High Street. Changing shopping habits mean retailers need to scale down their operations and if they must have a physical presence, the move to secondary or tertiary areas. If they cannot afford prime sites, tough. They have no given right to be there.

    The medium to long term future for City Centres will be mainly leisure and residential areas, with little in the way of clothing retail as declining footfall has not been taken into consideration in recent years, leaving too many on the back foot hoping for change that will never come.

    The younger end are voting with their feet - they are shopping online and that isn't going to reverse, so the Government would be wise to spend their resources in different ways.

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  • Regardless of rates, High Street Clothing Retail has been in decline for years, Imbex/MAB, these trade shows were stuffed to the gunnels with Brands and Retailers (characters!!) from up and down the Country, the Indies made the High Streets desirable then the Multiples moved in and rates went up, add in out of town Retail Parks and the Brands and Indies have been almost killed off, with the rise of online now the Multiples are being killed off. Perhaps, in time, like vinyl, it will again become a novelty but in the meantime it needs totally re-inventing, as has been said countless times it must be exciting and a new experience not a depressing one, which is what most High Streets have now become, unlike Coal Drops Yard which i'm loving the look of!

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  • Clothing stores still have the pub mentality i.e If I open up, people will come. WRONG.

    To have any chance of survival, they must do much more on every level and make shopping a whole experience.

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