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Business rate rise threatens to wipe out UK high street shops
With rising business rates threatening to wipe out small high street businesses, retailers, MPs and newspapers are calling for a root and branch review as they launch campaigns to save Britain’s high streets. But what are business rates, why are they increasing and how is this problem being tackled?
What are business rates? Business rates are a property tax based on rental values. You pay these to the state, support the UK economy. Each year in February or March, you’ll receive a business rates bill from your local council for the following tax year.
Why business rates are rising by £152m
Business rates increase annually, in line with September's Retail Prices Index, which is a measure of inflation. Increases will total £152m in April. The UK’s key inflation rate climbed to 3% in September, due to increases in transport and food prices.
According to CVS chief executive, Mark Rigby, "Brexit is driving inflation,". He urges the chancellor to be "bold" in his November Budget and freeze inflationary rate rises in 2018. Households are having to tighten their belts on spending, as import prices rise faster than wages and the pound falls.
UK’s retail crisis with more than 50,000 jobs cut
With Britain’s largest businesses cut 50,000 jobs in the last six months, high street shops struggle to compete with online trade. The retail TV celebrity Mary Portas has predicted that a third of independent shops could be killed off by this hike in business rates.
Campaigns have been launched to target sky-high business rates and save Britain’s high streets. Among others, our partner, the FSB is campaigning for change by repeatedly calling for the reform of the business rates system, as well as introducing and improving small business rate relief schemes across the UK.
From this campaigning, the Chancellor has announced a review of the current, outdated business rates system. In his Spring Statement, Chancellor, Philip Hammond announced the government will bring forward the next business rates revaluation from 2022 to 2021. For more information about announcements in this year’s Spring Statement, read our article: A summary of UK spending plans 2018.