80,000 high street shops could close due to business rates

With changing shopping habits and an evolving high street, the British Retail Consortium has warned more than 80,000 stores across the UK could close within two years without an adjustment of business rates.

Thousands of shops may not renew expiring leases

As the leases of stores come to an end, thousands of shops may opt to not renew, due to the high business rate tax. BRC labels business rates as a “tax on jobs and growth."

The tax levied on small business can be an enormous burden. Currently the rates for Central London are calculated at a rate of 0.484 (48.4p in the £) and charged according to the size of the property.

According to the BRC, the closures could lead to the loss of 800,000 jobs and its figures are based on what would happen if six out of every 10 high street retailers who have leases expiring in the next two years opted not to renew them.

The BRC has called on Chancellor George Osborne to prevent a town centre exodus by reforming the business rates system to improve the climate for retailers.

Business rates bring in £28bn for the Treasury

Business rates bring in about 28 billion pounds for the Treasury this year, so it is not a tax the government can easily find elsewhere.

At the same time, research by Verdict revealed the number of town centre shops has declined from 148,990 in 2004 to 129,121 now.

It predicts that even if all store leases are renewed, there will still be more than 8,000 fewer shops on our high streets owing to the continued growth of online shopping

The BRC has urged the Chancellor to provide a tax relief for small business, scrap the inflation-linked increase in business rates and conduct property valuations every three years instead of five to make the system fairer for retailers.

The government should advocate growth

In its report, the BRC wrote: “For a government which has advocated pro-growth policies to support business and embed the recovery, business rates are an anomaly and stand out in an otherwise moderate tax regime.

“Business rates are a tax on jobs and growth and when combined with structural changes to the retail industry risk leading to far more store closures, job losses and high street vacancies."

Image:Closed for business