09 Feb 2021

Bira: Reform business rates to 'level up playing field'

Bira has joined other trade bodies and retailers in calls for the business rates system to be reformed to make it fairer for physical stores.

In an open letter to Chancellor Rishi Sunak 18 groups including Bira, Tesco, Asda, Waterstones and the Association of Convenience Stores (ACS), have called on the Government to make fundamental changes to the way that business rates are collected so that physical stores aren’t at a disadvantage compared to online retailers.

The letter makes the following specific recommendations:

  1. Reducing the business rates multiplier: The multiplier has risen from 35% in 1990 to more than 50% today. It should be significantly reduced, focusing on a level closer to the original rate of around 35% of the market rent. This would make the UK more competitive and show the Government is backing British shops.
  2. Level the playing field on tax: Currently online retailers pay a lower proportion of tax per sale than bricks and mortar retailers. We urge the Government to rebalance the tax base to ensure online and bricks and mortar retailers pay a similar proportion of tax and we welcome the consideration of viable options in the Government’s ‘fundamental’ review.

Speaking about the matter, Bira CEO Andrew Goodacre said: "It is important that steps are taken to ‘level up the playing field’ between high street retailer and the online giants.

“The pandemic has accelerated the growth of online shopping and the imbalance can no longer be ignored. Amazon pays less than 0.5% of its turnover on business rates, compared to 2.5% for traditional retailers.

“With income from business rates set to decline as large retail chains fail, it is inevitable that the Government would look at  the introduction of an online sales tax, which has been suggested several times. However, the introduction of such a tax must be used replace business rates for those retailers most affected by the change on the high street – only then is the playing field levelled up.”

Andrew talks to the London Evening Standard about the matter here

* The letter was signed by: Andrew Goodacre, CEO of Bira; Ken Murphy, CEO of Tesco; Thierry Garnier, CEO of Kingfisher; Paddy Lillis, general secretary of Usdaw; David Potts; CEO of Morrisons, Roger Burnley, CEO of Asda; James Lowman, chief executive of Association of Convenience Stores (ACS); Peter Pritchard, CEO of Pets at Home; James Daunt, managing director of Waterstones; Mark Bourgeois, managing director UK & Ireland at Hammerson; Jerry Schurder, head of business rates at Gerald Eve; Mark Williams, executive Director of Rivington Hark and former chair of HMG’s Retail Property Taskforce; Vivienne King, chair of The Shopkeepers’ Campaign; Philip Bier, CEO of Bier Retail; Lawrence Hutchings, chief executive of Capital and Regional; Allan Lockhart, CEO of NewRiver REIT; Scott Parsons, chief operating officer UKof Unibail-Rodamco-Westfield; and Morgan Garfield, managing director and co-founder of Ellandi.

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