Retail leader urges new business rates in response to the living wage
Retail chiefs made the recommendation because of what they call the 'unintended consequences'
The Treasury is due to report back on a review of the rates system, which the British Retail Consortium should be overhauled to lift the heavy financial burden from property intensive industries. Business rates bring in over £25billion a year for the Treasury, but have drawn criticism for being linked to outdated property valuations rather than economic output.
Without an adjustment, it is feared tens of thousands of stores across the UK could close within a couple of years. The BRC’s latest warning accompanied figures showing an encouraging trading performance by Britain’s stores in January alongside continued online growth.
The current business rates bring in over £25billion a year
Like-for-like sales were up 2.6 per cent on 2015 and by 3.3 per cent in total, the best growth since last September.
The new year kicked off to a strong start after a somewhat disappointing Christmas period for retailers
BRC chief executive Helen Dickinson
Online sales of non-food items rose by 14.9 per cent and made up 21.5 per cent of total spend, up from 20.1 per cent on 2015. Furniture and home accessories were among the top selling products, while New Year sales drew bargain-hunters in search of clothing and footwear.
BRC chief executive Helen Dickinson, said: “The new year kicked off to a strong start after a somewhat disappointing Christmas period for retailers.
BRC chief executive Helen Dickinson said the new year has started well
Thousands of stores may close
“Next month the Treasury will report back on its long awaited review of the business rates system. This is the moment for the Government to rebalance this tax away from property intensive industries in order to ensure that the introduction of the living wage does not have unintended consequences on our local communities and jobs.”
IHS Global Insight chief UK economist Howard Archer said prospects for consumer spending appear “relatively healthy” this year as inflation stays lower for longer.