Published on October 24th, 2013 | by The GC Team0
BRC moves to solve business rates problem
The BRC today announced the appointment of tax experts EY to support a “rigorous process” of examining the options for reform of the business rates system.
The outcome will be recommendations for changes to business rates that will contribute to UK economic growth, reinvigorate high streets and town centres across the country, and secure new retail jobs, the organisation said.
Following September’s RPI rise, the BRC predicted that retailers will face a £242 million increase in business rates in 2014.
The Retail Price Index for September rose 3.2% and this is the figure that will be used to calculate next year’s rate rise.
Analysis for the BRC showed that the rise in RPI will mean for every £1 in corporation tax retailers pay, they will have to pay £3.44 in business rates. In 2005 it was just £2.48 per £1 in corporation tax.
The planned tax increase also puts 20,000 full time jobs at risk due to potential shop closures and reduced investment.
Helen Dickinson, British Retail Consortium Director General (pictured), said: “At the BRC we have been saying for some time that tinkering with the existing business rates system, which is no longer fit for purpose, is not the answer. Complete reform is the only solution that can support retailers in continuing to deliver a vibrant and sustainable retail industry for UK consumers and local communities.
“I am excited to be able to announce that we have appointed EY to work with us, building on our existing work to date. They have a proven track record in helping businesses and governments work through complex challenges where the solutions are not obvious. While there are ideas for rates changes already in the public arena, we believe there are other options not yet considered and none have been subject to robust economic impact assessment.
“Our work will be inclusive and open. I want to see retailers large and small, from right across our sector, getting involved as the debate on what reform could look like moves forward. And it won’t stop there; we know that other parts of the business community along with their respective trade associations share our passion to address this issue and we will be seeking their input and collaboration.
Chris Sanger, Global Head of Tax Policy at EY, commented: “Working with the BRC over the coming months, EY will be bringing our tax expertise to bear on the important issue of business rates. We will be advising the BRC on possible solutions that could bring huge benefits to the UK economy as a whole, as well as for retailers.
“The business rates regime is a 400 year old system, with an assessment approach designed over 50 years ago. It is complex to operate, creating expensive bureaucracy and confusion around its role, given it has become a national tax raised theoretically for local services. The time is ripe for reform.”