According to latest media reports the Chancellor Rishi Sunak is to announce that that he is delaying the Government response to the consultation over business rates until later in the year.
John Webber Head of Business Rates at Colliers said that if this is the case, Sunka will be another in a long line of chancellors in kicking the issue of business rates down the road.
“The government has delayed its announcement four times in the last year,” said Webber. “We were supposed to hear in the Autumn, then in the New Year, then in the Budget and now it’s the Autumn again. This is despite the Treasury Select Committee producing a very credible report with sensible recommendations in Autumn 2019 which now seems to have been ignored – not to mention all the consultations and reviews we’ve had in previous years.
Webber added that it is “all very well” for the Chancellor to say he is postponing the report to the autumn in order to make decisions when the economic uncertainty caused by the coronavirus pandemic has receded, but the realty is that this “is shutting the stable door when the horse has bolted.”
“High business rates is one of the key factors that has helped decimate our high streets and the current system is skewed against the retail and hospitality sectors,” said Webber. “We urgently need to re-balance this 50 per cent tax by re-basing the multiplier to 30p in the £1- for a start and we need more frequent revaluations so that we don’t see rates tied to totally out of sync rental values.
“Procrastinating over this now is only going to mean more job losses across the sector- long before the Autumn arrives.”
Speaking to the BBC, Next chief executive Lord Simon Wolfson said the current rates system is “unfair” to physical retailers and warned that a huge number of stores will need to close unnecessarily, arguing that business rates have not reflected the falling value of High Street retail property value over the course of the pandemic.
Lord Wolfson said: “In-store sales at Next have gone down 25 per cent since 2015 but our rates on those properties have gone up 9 per cent. They have become unfair because they no longer reflect the value property against which they’re charged.
“Rents on shops have been coming down, rents on warehouses have been going up and the rates don’t fairly reflect the value of warehouse property either. So I think the government can fund some of this by increasing rates on warehousing by around 50 per cent”.