UK200Group have commented on a warning from retailers about the latest business rates review
Retailers have warned that the government’s review into business rates lacks ambition and would do little to improve the situation for most business owners.
Speaking in The Guardian today, industry sources with knowledge of the talks between retailers and the Treasury said they were “extremely concerned by the lack of ambition” and that “patience is running out across the business community.”
The sources say that retailers ultimately feel that not enough is being done and that significant change is needed more urgently, especially considering the introduction of the national living wage next year.
HM Treasury have said that the review should be complete by the end of the year.
Duncan Montgomery, tax partner, UK200Group member firm Whittingham Riddell LLP: “Business rates exemption for micro-businesses are very effective at the bottom end of the market, and with retailers complaining again, we are seeing high streets becoming less vibrant on a daily basis.
“While help for business is always welcome, it is up to individual businesses to plan now for the known costs of the national living wage and business rates. Cash-flows are a crucial tool in working out direction, and, if expansion, offering changes, or product development is in the pipeline they need to be funded and developed in conjunction with knowledge of likely cash outcomes, well before the new wages hit.”
Jonathan Russell, partner, UK200Group member firm ReesRussell: “Let us be honest, business rates are just another tax on businesses, which because of the valuation basis being so out of date places a higher burden on high street shops and offices.
“However, the government needs to raise its taxes from somewhere and there will always be winners and losers in every tax mechanism. Retailers whine about business rates, because they are seen as losing out, but they don’t complain about the way – more than many other industry sector – that they utilise part-time workers to avoid paying employer’s National Insurance (NI).
“Retailers will along with some other industry sectors lose out more with the national living wage, but I suspect many existing employees will find their hours being cut to keep them below the NI limits.
“We can have sympathy for many industry sectors, but at the end of the day businesses have to structure themselves to make a commercial return and that includes retailers – stop whining and get on with business and change your business model with changing times.”