Comment: Join our push for business rates freeze

There is nothing sexy about business rates.

They don’t have much globe-trotting glamour and perhaps that is part of the problem. As taxes go, they are more cup of tea than cafe au lait.

One of the Government’s flagship business pledges is to make the UK the most competitive tax regime in the G20. It’s a great ambition, but one that’s put most of the focus on internationally mobile companies that can move their capital from country to country.

End result? Corporation Tax cuts – down from 28% in 2010 and heading for 22% by 2014, according to the Chancellor.

This is very welcome progress but Mary Portas, Town Teams and lots of warm words can’t obscure the Government’s failure to do anything similarly positive with dull, old, hard to escape business rates.

Remember, corporation taxes are on profits. Little is paid in lean years. But rates are on property and rise relentlessly regardless of company results. And, of course, they’re even paid on empty premises.

I accept the Government needs to bring in revenue, and rates are the third largest business tax. And property is an easy target because it can’t move or hide. But that’s missing the point. Increasing business rates hits investment too. 

An Oxford Economics study for the BRC shows retail investment is down 27% in real terms over five years. In our vacancies survey this summer the number of functioning shops fell for the first time.

That’s why the BRC and Retail Week Fair Rates for Retail campaign matters so much.

As you read this, we now know this year’s September Retail Prices Index figure. Established practice is to translate that directly into next April’s rates rise, which could add another £175m to retailers’ costs if it’s followed through.

That’s why we’re asking everyone with a stake in successful retailing to join us in pushing the Government for a freeze in 2013 and to act on its commitment to review the system for annual increases and to bring in a fairer formula for the future.

Meanwhile, the five-yearly process that determines rateable values starts again next year and there are anomalies it needs to put right.

A combination of rising rates and falling rents in some marginal locations has changed the rates/rents ratio from perhaps 40% to parity – undermining the market for those properties in those locations.

It’s vital the revaluations are accurate and genuinely reflect conditions compared with when they were last assessed in 2008.

Because it uses a lot of property, retail pays more business rates than any other sector – 28% of the total. So we need a supportive system and politicians should want that too, because the jobs and services those shops provide are spread across every constituency in the UK.

• Stephen Robertson, Director-General, British Retail Consortium