UK retailers are eagerly anticipating the spring Budget, which will be delivered by the Chancellor of the Exchequer on Wednesday. They are particularly hopeful for changes to Sunday trading rules and reform of business rates. However, it is interesting to note that the request for the return of VAT-free shopping for tourists was not included in the statements released on Monday, as it is seen as unlikely to happen.
Representative bodies for the West End and Knightsbridge are urging the government to exempt them from the 1994 Sunday Trading Act. Data reveals that Sunday is the busiest shopping day in these central London districts, with the highest footfall per trading hour. Extending Sunday trading hours could significantly increase sales and contribute to job creation.
The New West End Company (NWEC) and Knightsbridge Partnership have jointly submitted a Budget representation to the Treasury, emphasizing the significance of these districts for international shoppers. These areas are major attractions for visitors to the UK, and it is estimated that over 25% of the £28.4 billion spent annually by international tourists in the UK is on shopping, mostly in the West End and Knightsbridge.
However, the West End and Knightsbridge face tough competition from other global shopping destinations like Paris, Milan, and New York, as well as emerging retail districts in the Middle East that have fewer trading restrictions. Milan and New York have no Sunday trading restrictions in similar areas, and Paris has relaxed its laws in regions popular with tourists.
NWEC commissioned research from Volterra, which indicates that extending Sunday opening hours by just two extra hours in the West End and Knightsbridge could generate an estimated £340 million annually. This would result in £70 million of additional VAT and support over 2,000 jobs.
Apart from Sunday trading rules, real estate specialist Colliers is also advocating for fundamental reform of business rates. John Webber, Head of Business Rates at Colliers, believes that the measures introduced last year were only a temporary solution to the ongoing problems with the current business rates system. He argues that by reducing the “multiplier” used to calculate rate bills from around 50p to 34p, the UK would align with other European countries where businesses pay a smaller proportion of their rental value in property taxes.
Colliers also suggests extending business rates relief until 2024/25, providing a longer period for empty property rates relief, conducting annual revaluations to accurately reflect current property values, increasing transparency, and repealing the complicated appeals system, among other recommendations.
Webber emphasizes the importance of a well-managed and transparent business rates system that fosters a favorable environment for businesses rather than penalizing them. He highlights that the Conservative Party promised a fundamental review of the system to reduce business rates in its 2019 Manifesto, a promise that has not yet been fulfilled.
Useful links:
1. VisitBritain: Visitor Economy Facts
2. Colliers
