Colliers label business rates bill ‘poorly thought out’ and ‘growth strangling’
Commercial real estate agents Colliers has said the Government’s business rates bill will strangle growth rather than succeeding in saving the high street.
The Non-Domestic Rates Bill is currently on its third reading in the House of Lords before being sent back to the Commons.
“The Government is rushing through Parliament new business rates legislation that has not been properly thought out and will potentially add millions of pounds onto the rates bills of UK PLC – doing little to help grow the economy,” John Webber, head of business rates at Colliers said.
As it stands, the bill will introduce a higher multiplier for business with a rateable value – market price – over £500,000, using the proceeds to set a lower tax for smaller businesses.
It aims to help small businesses on the high street who have been struggling with soaring costs and low footfall.
High Streets UK has previously labelled the bill a “disaster for jobs, investment [and] growth”.
“Current proposals place too great a burden on the UK’s flagship high streets, undercutting the government’s national growth ambitions,” Dee Corsi, Chair of High Streets UK, said.
There is concern that if anchor stores on the high street are forced to close due to the higher tax, footfall will drop further and all shops on the high street will see sales drop.
Lords propose range of amendments
At the bill’s third reading, the House of Lords proposed a number of amendments to the bill, including exempting hospitals and anchor stores from the higher multiplier.
The Lords also proposed included the manufacturing industry in the lower tax band, and a review on how the bill will affect business with a rateable value close to £500,000.
Webber welcomed the amendments as “common sense” but said the government was unlikely to accept them.
“Given the government’s enormous majority in the House of Commons, it will most likely reject these amendments from the Lords, despite the common sense they bring; and the bill will become law.
“I hope however that the government will at least consider the issues that have been highlighted and conduct some fact finding among businesses,” Webber said.
But business rates expert at Hartnell Taylor Cook, Chris Grose, said that the government can’t “subsidise retail rents” in the long term.
“There’s going to be a reduction [in the number of shops], but that’s also to do with consumer demand… You need to be doing something in order to match the amount of retail space to the demand,” he added.