On the final day of the UK government’s consultation surrounding the Transitional Relief scheme, the British Retail Consortium (BRC) is calling on policymakers to end the “downwards phasing” part of the system.
According to the organisation, retailers have already warned that failure to fix the “flawed” system could cost the industry over one billion pounds between 2023 to 2026.
Transitional Relief, which comes as part of the government’s 2023 Business Rates revaluation, limits how much a firm’s business rates can change in a year, requiring those being overcharged on their business rates to subsidise those who are underpaying.
Its goal is to gradually move businesses to the “correct” rate over a period of years.
However, the BRC said that the system has resulted in retail subsidising other sectors, as well as requiring businesses in poorer parts of England, where rent is dropping, to subsidise those in richer areas, forcing them to pay much higher rates.
“The business rates system is damaging our high streets and town centres by directly undermining store viability,” said Tom Ironside, director of business and regulation at the BRC, in a release.
Ironside continued: “The retail industry accounts for five percent of the economy yet is saddled with 25 percent of the total business rates bill. This is directly contributing to the loss of shops and jobs, particularly in many of the parts in the UK in need of ‘levelling up’ and putting additional pressure on prices.”