Big retailers warn that business rates reform still falls short
Business rates reforms are 'far away' from what UK retail has been promised, the country's biggest businesses have warned.
Businesses including M&S and Sainsbury's have hit out at what they describe as just “tweaks to the tax”, which leaves physical stores still facing a high tax burden, reported ThisIsMoney.
With business rates charged on stores and other business properties relative to their rental value, critics say the system unfairly punishes those with a physical presence, particularly in town centres, while online businesses face lower bills.
They claim the government had promised a “fundamental” review, but said changes so far are insufficient and warned that the tax is still “throttling local economies”.
M&S chief Stuart Machin told the financial website that stores make up a bit more than 5% of the economy, but pay almost a quarter of business rates, “stifling investment and forcing up prices”.
Machin said the levy “cannot continue” as it is, adding: “We welcomed the Government freezing rates and ending downwards transition last year but it's time they take decisive action to protect the retail industry, create jobs, bring customers back and support communities.”
However, the government said it has provided “generous” business rates support while its reforms had helped level the playing field between bricks and mortar stores and online retail. And chancellor Jeremy Hunt was praised last year for handing firms £13.6 billion in business rates support.
The British Retail Consortium said they were “essential steps” but described them as “a far cry” from the Conservatives' 2019 manifesto pledge. Its CEO Helen Dickinson said: “The broken business rates system is a drag on investment, jobs and town centres.”
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