6 Shops A DAY ‘Vanish’ from High Street during the last 7 years
In just 7 years, during the life of the previous business rates regime, 15,856 shops across England and Wales have completely ‘disappeared’ from the communities that they once served.
The Centre For Retail Research say so far this year 1,364 stores have been affected through retail insolvencies. Last month has seen Feather & Black and MultiYork fall into administration with a total of 74 stores being affected with both Thomas Cook and Toys R Us also announcing that they expect to shutter a further 75 stores between them.
Research by the Altus Group shows that at the start of the last Rating List in April 2010, the shop count stood at 430,360 with a total collective Rateable Value of £7.86billion. But, at the start of 2017 Rating List, the numbers of shops liable for business rates had fallen by 3.68% to 414,504 with a combined Rateable Value of £8.14billion.
Despite the fall in the number of shops, and as the market reacts, overall Rateable Values, used to calculate how much business rates tax shops pay, have risen by £286million.
Sajid Javid the Secretary of State for DCLG has already vowed to “level the playing field” between online retailers and high street shops with the Chancellor saying at the Spring Budget that the digital part of the economy needed to be better taxed in the medium term – although no specific measures have so far been announced with the Government’s position paper on the tax challenge posed by the digital economy, released at the Autumn Budget, failing to include the impact on business rates.
Alex Probyn, President of UK business rates at Altus Group, the UK’s largest rates advisor, said: “The face of retail is changing. The conversation now to be had, which is a difficult one, is how to level the playing field between bricks and clicks.”
“Property taxes should be about physical property. It’s the wrong mechanism for taxing digital businesses. An online sales tax might be used to level the playing field, but it does not belong within a system based largely on rental values.”
“An online sales tax, for example, should not be seen as a generator of additional income. But revenue could be ring-fenced and used to provide additional relief for traditional bricks and mortar retailers.”
The Chancellor did bring forward from 2020 to next April a switch in inflation uprating for business rates in his Autumn Budget to the lower CPI measure but Altus Group says that will still drive revenue receipts up by £884 million with the retail sector shouldering £226 million of that rise.