Businessmen demand urgent restructuring of business rates

Britain’s biggest retailers are demanding an urgent review of business rates amid fears more than 17,000 stores could close over the next decade unless the hated system is reformed.

The Labor Party has promised to “level the playing field between the High Street and the online giants” by replacing the tax, which is paid on the rateable value of a commercial property.

But in her first Budget, Chancellor Rachel Reeves left businesses facing a £140m rise in their bills next year.

It cut rates relief from 75 per cent to 40 per cent capped at £110,000, meaning smaller businesses in particular will pay significantly more.

This comes on top of a £2.3 billion increase in employers’ national insurance contributions and a £370 million rise in the national living wage, according to trade body British Retail Consortium.

“We urge the Government to reconsider,” said Alex Baldock, chief executive of electricals retailer Currys.

“The rate reduction proposed so far is not only too little, too late, but will actually leave many retailers worse off,” he said.

Rami Baitiéh, the boss of supermarket chain Morrisons, echoed their call: ‘The current proposal threatens to drag hundreds of supermarkets – which are crucial to the thriving High Street – into even higher trading rates.

“We urgently need a business rates system that is fair, proportionate and truly levels the playing field between online retailers and operators,” he added.

Under Labour’s plans, premises with higher rateable values ​​would pay more. It has described this as targeting warehouses used by online shopping giants, but would also affect traditional supermarkets. The retail sector pays £33 billion, or 7.4 per cent, of all business taxes, which is one and a half times its share of the overall economy, according to the BRC.

Business rates make up a fifth of the total tax paid by retailers – the highest of any sector.

The UK has already lost 6,000 stores in the last five years and in two-thirds of these closures, activity rates had a material impact on the decision.

The BRC estimates a further 17,300 stores could close over the next decade unless action is taken.

The Chancellor has delayed the introduction of a new business rates system until 2026 at the earliest.

Meanwhile, smaller retailers will pay thousands of pounds more due to reduced support. Experts fear many will have gone bankrupt before Labour’s new system comes into effect.

“It’s crazy,” said Doug Putman, owner of music retailer HMV.

He added that he felt governments had been leaving the issue “in the future” since he bought the business in 2019.

“At some point, they have to stop looking at it and do something about it,” he said.

As well as additional employment costs, observers fear the added cost of business rates and further delay in reform will push some smaller operators over the edge.

Meryl Halls, chief executive of the Booksellers’ Association, said it was “deeply worrying” that 40 per cent of its more than 1,000 member independent bookshops were facing an average annual cost rise of £9,341.

He urged the Government to “reconsider the timetable” and ensure “vulnerable businesses are not left financially stuck for a year before vital reforms are introduced”.

The British Beer and Pub Association estimates that the average pub bill will rise from £12,000 to around £18,000 next year.

And the head of the British Independent Retailers Association said its 4,500 members – including garden centres, DIY stores and furniture retailers – were “reeling” about the upcoming rise.

Andrew Goodacre said: “The High Street shops can’t take any more.”

He asked the Government to maintain the 75 percent discount on fares.

‘Business rates have more than doubled, at a time when independents can least afford it. “This seems like a clear violation of a manifesto promise.”