Ahead of publishing their formal manifesto the Conservatives have pledged to increase the business rates discount afforded to small retailers to 50%, up from the current 33% reduction. They estimate that this will lead to an average saving of £1,400 per business. The British Retail Consortium have been critical of these plans stating that they do not go far enough in aiding the high street to ward off the competition faced by online retailers.
The Liberal Democrat leader Jo Swinson pledged that they would scrap business rates in favour of a commercial landowner levy. This raises the question of whether such a switch will lead to higher rents for businesses if landlords seek to pass on the additional cost to their tenants.
The Green party manifesto includes a number of radical proposals to reform taxation to fund their Green New Deal. On land and property taxes the proposals include abolition of council tax and business rates (as well as absorbing a number of other taxes), and replacing them with a land value tax phased in over 10 years with reliefs and protections for those on low incomes.
The Labour party in their manifesto have pledged to review the use of a land value tax as opposed to business rates and bring in a retail sector industrial strategy. They would also give councils greater powers to bring empty shops in to use and stop bank branch closures and ban ATM charges in an effort to stop the erosion of the use of physical cash.This is alongside their planned re-nationalisation of the Post Office and creation of the new Post Bank.
Alistair Walton, retail property partner, commented:
"Whilst welcome proposals, they simply do not go far enough to ease the burden of business rates on the UK's retailers. The Conservatives' promise to increase the discount to small retailers may help to stave off some of the decline in the high street, but will not help many of the nation's favourite national retail chains which we have seen struggle this year. Other parties' proposals to swap business rates for a form of land tax may seem beneficial to retailers but it would be unsurprising if landlords don't look to find some other way of pushing those increased costs back to the retailers by way of increased rents or otherwise.
"In brief, nothing short of a fundamental review of the business rates system in the UK is required and for too many struggling retailers this can't come soon enough."