New report shows damaging impact of ‘shops tax’ on the levelling up agenda predicting further shop closures and job losses across the country. Time has run out for the restrictive business rates tax regime.
The British Retail Consortium (BRC) is calling on the Chancellor to unlock retail’s contribution to the economic recovery from the pandemic by delivering a cut in the business rates burden in the Autumn budget. The retail trade association also urged the Chancellor to stand by the Conservative Party’s manifesto commitment to “cut the burden of tax on business by reducing business rates” through its Fundamental review, due to conclude in Autumn.
The BRC cites the findings of its recent survey that confirmed that in the absence of what it described as a substantial reduction in the burden of business rates that four out of five retailers would be forced to close additional stores across the country, further eroding the fabric of local communities.
The BRC’s Budget Submission includes a long term substantial reduction of the £8bn annual rates tax burden on retailers, remove the requirement for rates to raise a fixed sum, allowing it to flex in line with economic circumstances and introduce a one-year ‘bridging relief’ of at least 30 percent for retail for 2022/23.
The submission also addresses other key retail priorities including debt moratoriums, Apprenticeship Levy and the ongoing HGV driver shortage.
A report by WPI Strategy shows the devastating impact that business rates, has on constituencies in need of levelling up. The report argues that business rates will cause store closures right across England and Wales. It states: “Without business rates reform, more shops will close. Fewer retail jobs will be created, and more retail jobs will be lost.” According to the report, effects will be most acutely felt in the North of England, the Midlands and Wales.
Helen Dickinson, Chief Executive at the British Retail Consortium, explained: “The evidence is clear: business rates are costing shops and jobs and undermining the government’s ‘levelling up’ agenda. Retail is the UK’s largest private sector employer and serves as a vital lifeline to places most in need of levelling up, offering flexible jobs, supporting other businesses on the high street, and breathing life into local communities. The business rates review is a great opportunity for Government to put the ‘shops tax’ into reverse, and support investment and growth in the regions that need them the most.”