More big names join the list calling for business rate reform

High street woes continue to stay in the headlines this summer and whilst news heads into the silly season (Brexit and wild fires aside) more big names are taking the opportunity to talk about business rates.

Next chief executive Lord Wolfson, also a Tory peer, told ITV news that business rates needed to be updated to reflect major changes in retail, triggered by online shopping.

He wants to see non-domestic rates become “more responsive” to today’s reality and said that in his national chain there were many shops where they pay higher rates than rents.

Broadly he was asking for frequent revaluations, up and downwards, so the rates are a fairer reflection of the property value. A great idea in principal and we are seeing more frequent revaluations every three years on their way, but it sounds like Lord Wolfson would almost welcome an annual review?

The problem with that is the sheer amount of additional work this would create for the VOA and ratepayers themselves which is already groaning under the strain of CCA appeals, budget cuts and staffing levels under the cosh. Imagine annual reviews and then the appeals this would also attract – the backlog would be monumental.

On the plus side, he did say that of the goods Next sell online, 50% of them are collected from a store and that gave him “absolute confidence” that stores will be around in 5 or 10 years’ time.

Lord Wolfson is also joined by one of the newer business kids on the block, albeit not one affected by business rates directly – Deliveroo. The restaurant delivery platform started to lobby the Government to “give restaurants a break” and simplify business rates.

It recently conducted its own partnered research into the effect of rising business rates on restaurants. Its research found that 41,000 UK restaurants will pay £1.5bn in business rates over two years, averaging £36,585 per restaurant. That is a little bit simplistic; the reality is that rates are scaled according to size of premises, location, and notional rental value, a value estimation determined by the VOA, in addition many small restaurants attract a variety of business rate reliefs.

Around 500 of the 10,000 listed on the Deliveroo platform took part in its survey and rising business rates ranked third of the three concerns. The other two were “labour availability” and “rising food costs”, both side-effects of Brexit no doubt.

So still plenty of influential voices to be heard on this subject but I still haven’t seen any substantial solutions on how business rates can be made to fit for purpose to suit our multi-platform and faster-paced business world. But look at Wales, no CCA and a simplified system… perhaps some of the answers lie there?