Retail leaders in the UK have expressed their disappointment with the government’s interim review of business rates, stating that it offers nothing new and fails to address key issues. The 33-page report, published on Wednesday, summarizes the responses received from industry players and outlines proposals for the upcoming fundamental review of the business rates system.
Property expert Colliers has criticized the review for reiterating what has been said for years without indicating any further action. They are calling for decisive action from the government to address the issue promptly. Similarly, Jerry Schurder, head of business rates at Gerald Eve, described the report as a “huge disappointment” and highlighted the government’s lack of action over the past 16 months.
The British Retail Consortium spokesperson emphasized the need for the government to act swiftly on the findings in order to fix the broken tax system. Retail leaders are particularly concerned about the unfair advantage enjoyed by online retailers due to business rates. The pandemic has further accentuated this advantage, with the shift towards online shopping. Respondents to the review have called for an online sales tax to level the playing field between online and offline businesses. While it is unlikely to replace business rates, many support using the revenue generated by the tax to reduce business rates.
However, some participants caution that an online sales tax could lead to increased prices for consumers, potentially impacting low-income households. Despite this concern, some believe that an online sales tax could contribute to the revival of the high street and the rejuvenation of communities.
The review also explored the possibility of a “delivery tax” as an alternative to an online sales tax. The Treasury is considering options such as a 2% levy on all online purchases or a tax on consumer deliveries.
In conclusion, the retail industry is disappointed with the government’s business rates review, stating that it lacks significant new proposals. The absence of a clear position on business rate cuts and the introduction of an online sales tax has left retail leaders frustrated. They emphasize the need for swift action to address the imbalance between physical and online retailers and to reform the business rates system to support businesses in the digital age.
Useful links:
1. British Retail Consortium – Business Rates in Britain
2. Colliers – UK Business Rate Reform Response
