30th January 2014
Alder King calls for root and branch high street rating review
The announcement this week by David Cameron that business rates should be “fundamentally reformed” is not unexpected, given Wednesday’s unveiling of a £415m package of business rates cuts and infrastructure investment designed to boost high streets and local economies.
The difficulty for government is that a replacement tax for business rates would have to raise around £24 billion per annum to cover the loss of rates revenue. To put this sum into perspective, income tax raises around six times this figure.
Those in Whitehall will also be aware that business rates are relatively cheap to administer, have a remarkably high collection rate and – more importantly in this political climate – are pretty difficult to avoid. As one commentator sagely pointed out this week “commercial properties do not re-locate to Switzerland.”
“What is needed is a root and branch review of the rating of the high street,” says Alan Morrish, partner in Alder King’s business rates team. “There does appear to be a lack of joined-up thinking at government level with initiatives to revive the High Street being at odds with a policy which cancelled a planned rating re-valuation in 2015.
“The world has changed dramatically with the retail landscape in 2014 being almost unrecognisable to the traditional High Street. Reform of the rates system is needed so the High Street has a real chance of regenerating and competing with e-commerce. There are straightforward measures which the government should put into place over the next few months. Failing to assist Britain’s retailers will inevitably put jobs at risk.”