Government urged to shake-up business rate rules

The Government must change business rate rules with the vast majority of MPs in favour of a fundamental shake-up, according to the British Retail Consortium.

The body, which represents the retail industry, found that three out of four MPs believe the current system is not fit for purpose with another 93 per cent believing reform is key to the survival of the high street.

Business rates are calculated based on the rental value of each property, however, the valuations took place in 2008 before the recession and many retailers feel they take an unfair burden compared with online-only players.

Some retailers in towns where rents have fallen since 2008 have seen their business rates bill overtake their rent bill, while senior industry figures including Sainsbury’s chief executive Justin King, and Home Retail Group boss John Walden have called the issue one of the biggest facing the industry.

Today the BRC published recommendations for reform including reducing the total amount of business rates, calling for them to rise and fall with the performance of the wider economy like other taxes, shared more fairly among different industries and introduce positive incentives for energy efficiency.

The Government is considering changes to the system, including bringing forward the next proposed revaluation – having previously extended it – but has so far refused to adopt fundamental reform.