finance

MPs ‘increasingly concerned’ over effect of business rates on high street retailers



MPs say they are “increasingly concerned” over the effect of business rates on high street retailers after a number of high-profile closures and thousands of job losses this year.

The Commons Treasury Committee has written to the chancellor to ask whether business rates are still “fit for purpose” as high street retailers increasingly struggle against online rivals.

Committee chair Nicky Morgan published the letter written to Philip Hammond in June expressing concern over the tax on business premises.

Ms Morgan said: “It’s clear that many bricks and mortar stores are struggling to remain competitive against online retailers, with the chancellor admitting that business rates can represent a high fixed cost for some businesses.

“The Treasury Committee is increasingly concerned with the financial burden that business rates are placing on high street businesses, and has examined the issue in its inquiries into VAT and the VOA.

“We are likely to scrutinise business rates further as part of our Autumn Budget inquiry later this year.”

She questioned whether the Treasury had done any analysis into the competitive advantage for businesses that focus on online sales.

The New West End Company, which represents retailers, hoteliers and property owners in London’s West End, added to calls for reform on Friday.

Sir Peter Rogers, chairman of New West End Company said: “Business rates are currently the biggest tax that high street retailers pay, accounting for nearly half of retailers tax bill.

“The current structure of business rates, whereby they are linked to the value of occupied property, not economic performance, provides online retailers with an unfair advantage and a 90 per cent rate discount in an already struggling bricks and mortar retail environment.”



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