Firms need help on business rates, says BRC

The British Retail Consortium (BRC) has asked the government to act on the rising costs faced by many retailers.

As part of its pre-Budget Report submission, the BRC said that many shops are on the verge of being hit with a series of substantial business rate increases.

The BRC argued that next April’s Business Rates increase would normally be based on this September’s five per cent rate of inflation but went on to point out that the rise in prices has dropped sharply since then.

A year later, retailers will have to deal with a 16 per cent cumulative increase in Business Rates liability as a result of the 2010 Revaluation, the BRC said. This compares with increases of 3.1 per cent for office occupiers and 1.5 per cent for industrial occupiers.

Stephen Robertson, the BRC’s director general, said: “Conditions are tough for customers and retailers and they’ll be tougher through 2009. Our latest Retail Sales Monitor shows like-for-like sales have now fallen in seven of the last eight months. Eighty-five per cent of customers believe we are already in recession and are reining in spending to match.

“Retailers are crucial to jobs, customers and communities. In recession our role is even more important. Government should be helping, not hindering. The Chancellor must use the Pre-Budget Report to reduce present and future costs.”

The BRC wants the Chancellor to ensure an affordable increase in business rates in 2009, not one based on September’s seventeen-year-high RPI inflation of 5 per cent; to curtail any extension in local tax raising powers, such as Business Rate Supplements; to re-introduce Empty Property Rates Relief; and to postpone the Business Rates Revaluation, currently planned for 2010.

Mr Robertson added: “Business Rates penalise retailers simply because they use a lot of property. The Treasury’s own analysis shows retail pays 27 per cent of the tax but makes up only 11 per cent of businesses. With tough trading conditions getting tougher, it’s vital that the burdens on hard-pressed retailers are not increased further.

“Abolition of Empty Property Rate Relief is adding substantial extra costs. Business Rate Supplements will pile more on top. Next April’s business rates increases and the expected enormous increases coming from Rates Revaluation in 2010 would only make things worse.”