Ministers in dark on business rate relief
Government admits not knowing how many independent high-street retailers have benefited from the system to date, says Simon Neville
Sunday 27 October 2013
The Government has admitted it has no idea how many small and independent retailers have benefited from business-rate relief, despite claiming changes to the system are saving the high street.
As a result of this poor information, critics argued this weekend that ministers are not taking the issue of rates reform seriously enough. Retailers have been calling on the Government to reform the business-rate system to regenerate the high-street, which is losing out to online retailers who do not pay the same levels of this levy, and claim the current tax system is not fit for purpose.
They are angry because ministers in their response to Mary Portas's high street review used a section of their official response to focus heavily on business rates. They said that 300,000 small businesses were taken out of business rates all together.
However, a Parliamentary question by shadow business secretary Chuka Umunna has found they do not know how many of those businesses are retailers.
"The Government continually cites small business rate relief as one of its key policies to help Britain's struggling high streets," he said. "Yet now ministers have revealed that they don't even know how many retailers, high-street businesses or independent shops the policy applies to."
Michael Sharp, chief executive of Debenhams, who this week called the current system archaic, agreed. He said: "What this shows is that the current business-rates system isn't fit for purpose, and isn't helping small businesses or large ones like ours.
"The retail environment is changing rapidly and because of the growth of online retailing, all retailers are finding that their stores are becoming less profitable.
"For the sake of the future health and vitality of the UK's high streets, it's essential the whole system is reviewed, and a new one relevant for today's new retail world put in place."
Business rates are charged based on the rental value of each set of premises, with properties up to a value of £6,000 given an exemption. A discount is granted to properties worth up to £12,000.
However, high-street stores usually command a premium and are unlikely to get an exemption.
Rates rose 3.2 per cent this year, adding an extra £242m to retailers' bills which means for every £1 paid in corporation tax, £3.44 is paid in business rates, compared with £2.48 in 2005.
Helen Dickinson, director general of the British Retail Consortium which is leading a campaign for the Government to cap business rates, said that while relief might seem like a good idea it may not work in practice.
She said: "The business rates system is no longer fit-for-purpose, and given its complexity, it is unsurprising that the Government is unable to determine how many retailers benefit from reliefs."
auctionThe first 23 lots have now gone. But there are 22 more still up for grabs
healthJames Bond's alcohol consumption puts him at 'high risk' of cirrhosis, tremors... and impotence
musicPolice chief rejects rappers' claims that his work is as dangerous as law enforcement or military service
comedy'Fresh Meat' star sees off stiff competition from Alan Carr, David Mitchell, Graham Norton, Lee Mack and Sarah Millican to win top prize
tvSpoiler alert: Find out the result of a heated final show
Beatles rush out 'bootleg' album to defy EU copyright law
Harvey Weinstein reveals his secret weapon on-set
Now that an oil trader's drinking has got him sacked, will we all have to make do with an afternoon latte?
Chiwetel Ejiofor and Idris Elba get nods for Best Actor, which no black Brit has ever won
Geoffrey Macnab reviews The Desolation of Smaug - the meat in Peter Jackson's Hobbit sandwich
peopleWhat advice would David Cameron give to his younger self?
- 1 Nelson Mandela memorial: ‘Bogus’ sign language interpreter made mockery of Barack Obama’s tribute in Soweto
- 2 Mystery of Epping Forest 'big cat' is solved
- 3 French café starts charging extra to rude customers
- 4 Australia incest case: Severely deformed children found in remote farming community after generations of inbreeding
- 5 Physicists discover 'clearest evidence yet' that the Universe is a hologram
- < Previous
- Next >
iJobs Money & Business
£30000 - £45000 per annum + Bonus + Benefits: Harrington Starr: Regulatory Man...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Pre-Sales / Cl...
£40000 - £60000 per annum + Bonus + Benefits: Harrington Starr: Regulatory Man...
£40000 per annum: Harrington Starr: Senior Network Engineer (CCNP, CCIE, Netwo...