Retailers enjoy a relief rally as Boris Johnson promises business rates review
Boris Johnson fired up the market for British retailers, promising to review business rates with a view to easing the taxes that companies pay for the buildings they occupy if he is elected as Prime Minister in December.
The “relief rally” came after a nightmare year on the high street, with big names such as Mothercare PLC (LON:MTC) most recently though to fashion retailer Monsoon going bust in the past year as online shops continue to rack up sales to the detriment of bricks and mortar.
In a speech at a CBI conference on Monday, Johnson said that a Conservative government would cut business rates, launching a fundamental review at their first budget, along with a raft of measures expected to bring a “billion-pound boost” to business.
Furthermore, the party have also said they will increase the structures and buildings allowance (SBA) from 2% to 3% to relieve taxes on the purchase, leasing, and construction of buildings such as supermarkets and high street shops, as well as an increase in relief to National Insurance contributions paid by employers on behalf of employees.
Federation of Small Businesses (FSB) national chairman Mike Cherry, welcomed the proposals on business rates, which “should remove small businesses from the burden of an outdated, regressive tax that charges small firms before they make £1 in profit, let alone £1 in turnover”.
But Helen Dickinson, chief executive of the British Retail Consortium (BRC), said that the cuts dont go far enough to fix our “broken” business rates system.
Business rates pulled in £24bn in the last tax year.
Despite retail only accounting for 5% of the UK economy, it pays 25% of all business rates.
The offer to cut business rates for SMEs is “welcome,” but “will not slow the decline in high streets that has seen many household names disappear in recent years”, said Dickinson, particularly as the “majority of the UK's 3 million retail workers are employed in businesses that will not benefit from the Conservatives proposed rates cuts”.
She added that the next government “should reduce the tax burden further” with freezes next years rates increase, and relief to encourage investment in our high streets.
The last angry instalment came in August, when the BRC of major UK retailers, including Marks & Spencer PLC (LON:MKS), Greggs PLC (LON:GRG), and Morrison Supermarkets PLC (LON:MRW) demanded the government freeze business rates to fortify the high street against collapse.
In a letter to the chancellor, Sajid Javid, the bosses called for an Read More – Source