The Retail Rates Challenge: A Call for Fair Reform

The British Retail Consortium (BRC) has today emphasised the urgent need for reform in the business rates system, and together with more than 70 retailers, has written to the Chancellor to make that case.

That letter highlights that, without urgent changes, four in five retailers may face imminent store closures.  Rising inflation has further exacerbated an already difficult landscape, with online sales being made more easily and frequently, if business rates were to increase significantly again, businesses would find themselves at breaking point. The letter underscores the devastating impact of the current business rates system and calls for a more equitable approach to support the retail sector.

Our retail and leisure team at Howard Kennedy works closely with an extremely wide range of retail and leisure clients, and we truly understand the significant challenges posed by the current business rates system. That is why in our upcoming Retail Report we will be formally announcing our next major retail campaign. It will be called “Reduce Retail Rates Now” – and its purpose is simple: to stand with our clients in demanding a change to a tax that is both outdated and unfair. The recent letter from over 70 retail CEOs highlights an urgent issue: the tax burden on retail properties is disproportionate and stifling investment in jobs, shops, and local economies.

Retail isn’t just about selling goods. High street shops create jobs, pay taxes, and contribute to the fabric of communities in ways that many online-only retailers do not. Despite making up just 5% of the economy, the retail sector pays 7.4% of all business taxes—a gap that needs addressing if we would like the retail sector not only to thrive - but to survive. It is notable that the only shops that appear to be thriving upon our high streets these days, are charity shops, who do not have to pay 80% of business rates.

Our Reduce Retail Rates Now Campaign calls for a fairer system. We agree that the proposed Retail Rates Corrector, a 20% reduction in rates for retail properties, would help balance the tax load and give retailers room to invest in their businesses and people. With stores closing at an alarming rate, reform is essential to keep high streets thriving. 

Alex Marten of Kenny's Music says of the campaign, "Supporting bricks and mortar high street retailers with fairer business rates as compared to online-only retailers would help fuel local spending, create jobs, and ultimately build stronger, happier communities."

As the Autumn Budget approaches, we urge the government to take action. A more balanced tax approach would allow retailers to continue contributing to local economies and communities, not just in taxes, but through jobs and services