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Chancellor admits rates affecting High Street

But no immediate change apart from suggestion of new tax system for online retailers

CHANCELLOR Philip Hammond has finally admitted business rates are hitting the High Street too hard, but has stopped short of making any immediate changes to the system.

Retail Gazette reported that, in a letter to MPs seen by the Daily Mail, Mr Hammond (pictured) refused to bow to parliamentary pressure to overhaul how business rates are charged, saying it supports the stability of local government funding.
Business rates, calculated on the price of a property the company occupy, generate an estimated £25billion a year for the Treasury.
However, the Chancellor suggested online retailers may soon be subject to a tax system of their own as he confirmed he would continue finding “a better way of taxing the digital economy” in order to reduce the tax advantages they have compared to bricks-and-mortar retailers.
And Treasury select committee chairman Nicky Morgan MP said they are “increasingly concerned with the financial burden that business rates are placing on high street businesses” and likely to look at business rates as part of the Autumn Budget later in the year.
Tesco chief executive Dave Lewis, Sainsbury’s chief executive Mike Coupe, Bank of England governor Mark Carney, The Entertainer chief executive Gary Grant, Argos chief executive John Rogers, retail expert and TV personality Mary Portas are among the high-profile names flagging the tax for damaging the retail industry.
On Wednesday, July 4, the British Retail Consortium urged the Government to implement a three-year freeze on increases until 2021 to allow for the reinvention and modernisation of retailers at a crucial time.
On the same day, a review conducted by a team led by retail expert Bill Grimsey called for “decisive action” to support retailers by scrapping business rates all together.
And earlier today, Friday, July 6, a report by the New West End Company, which represents more than 600 retailers in London’s West End, recommended replacing business rates with a revenue-based tax for businesses wholly or largely online and use the extra money raised to reduce the rates burden for other businesses.


Image from www.retailgazette.co.uk


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