LONDON (Reuters) - Prime Minister Boris Johnson’s government plans to introduce a 50% discount in business rates for Britain’s small retailers to boost the country’s struggling high streets and pledged a “fundamental review” of the whole system in the future.
Business rates are taxes to help pay for local services, charged on most commercial properties, including shops, warehouses, pubs, cafes and restaurants. They are currently calculated according to the rentable value of properties and have an annual inflationary uplift, or multiplier.
Setting out its new legislative agenda in a Queen’s Speech on Thursday, the government said the move will hike the current business rates discount for small retailers from one-third off to 50% off during the next financial year and extend that discount to cinemas and music venues.
The relief is eligible to retailers with a rateable value below 51,000 pounds ($65,433), so will not help Britain’s biggest store groups which have long campaigned for business rates reform.
“The government recognizes the role of business rates as a source of local authority income and will consider input from the sector as part of the review of business rates,” it said.
Industry lobby group, the British Retail Consortium (BRC), has for years complained the current system is unfair.
It points out that the industry is the largest private sector employer in Britain, employing about three million people. While it accounts for 5% of the UK economy, it is burdened with 10% of all business taxes, and 25% of business rates.
The BRC lobby group argues this disparity is damaging Britain’s high streets and harming the communities they support.
The government said it will also progress legislation to bring forward the next business rates revaluation by one year from 2022 to 2021 and move business rates revaluations from a five-year to a three-year cycle.
Reporting by William James and Kylie MacLellan, writing by James Davey; editing by Kate Holton