Refresh? Renew? Radicalise?

27/11/2019

With yet another General Election looming, the demise of the High Street is again a hot topic.

The UK’s high streets have long struggled to compete with online shopping, and the rising costs of maintaining a physical presence are causing real issues for retailers.

Ratepayers and their respective bodies have for some time been calling for the reform of the rating system, which they all agree is not fit for purpose. In addition, MPs on the Treasury Committee recently urged the government to consult on alternatives to the “broken” system. What they do all agree on is that business rates are still too high, complex, and place an unfair burden on bricks-and-mortar retailers.

Each party, through their manifestos, believes they have the answers to how the business rates system can be fixed. Their solutions range from reviewing the current set-up to a more radical proposal of scrapping and replacing the system altogether.

The Conservatives pledge in their manifesto to fundamentally review business rates, stating “We understand the challenge in increasing running costs, especially for smaller firms, and we are committed to reducing them”. Initially, they will extend the rate discount for small high street businesses, meaning those with a rateable value of less than £51,000 will receive an increase in the retail discount from 33 per cent to 50 per cent in 2020/21.

Labour say that business rates are “causing real issues for high street retailers” and would review the alternative option of a land value tax on commercial landlords.

The Liberal Democrate will “breathe new life into high streets” by replacing business rates with a commercial landowner levy, based solely on the land value of commercial sites rather than their entire capital. This, they say, would stimulate investment and shift the burden of taxation from tenants to landowners.

The Green Party have also pledged to abolish business rates and replace it with a land value tax. This will charge the landowner a proportion of the capital value of the land each year.

The Brexit Party have said that they will scrap business rates for high street retailers and leisure operators altogether “outside the M25”.

A fundamental review of the business rates system is absolutely vital. However, ratepayers have been promised action many times before so let’s hope whoever is in power on 13 th December makes this issue a priority.

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