Four in five UK stores could close if business rates aren’t slashed – BRC report

The British Retail Consortium is warning that four in five retailers will have to close stores in the UK due to business rate burdens.

The BRC says in its latest survey out today that 83% of retailers deem it “likely,” “very likely” or “certain” that they will close shops if business rates aren’t reduced following the far-reaching Government review that was announced last year and is due to report back this quarter.

It is now urging the Government to cut the multiplier used to calculate business rates annually to its original 1990 introductory rate of 35p in the pound – a move that would cost the Government hundreds of millions in lost tax revenue. The multiplier currently sits at 51.2p.

The BRC Chief Executive Helen Dickinson said: “This report underscores the urgency of fixing the broken business rates system which currently hold back new jobs and investment. With one in seven shops currently shuttered, it is essential that action is taken, or else it will be our local communities and high streets which suffer the consequences.

She added: “The government needs to bring the burden down and take action to ensure that the system reflects property market values more quickly. This should include a cut in the multiplier rate, returning it to its original rate of 35%.”

The BRC Retail Rates and Recovery report, questioned more than 40 leading retailers and also found that business rates played a role in two-thirds (67%) of store closures in the last two years, and it was the second most important issue that retailers consider when thinking about store closures, after rent.

The Report recognises that retail is transforming due to new technology and changing shopping habits, with online sales growing by more than a third in 2020. However, the BRC sees it members  increasingly using on and offline dual operation models, with one supporting the other. At the moment, eight of the ten largest UK retailers have both an online and high street presence.

“In the future, the role of shops will evolve to include service provision, fulfilment and other purposes, further cementing their position as cornerstones of communities. But the viability of shops is threatened by the unsustainable rates burden.” states the Report.

As well as slashing the business rates multiplier to 35p the BRC also wants to fix the transitional relief system and introduce an improvement relief to make sure rates bills don’t rise immediately because of property investment. Reforms to the Valuation Office Agency with improved valuations and speedier appeals are also on its wish list.