The Chancellor will again delay plans to overhaul the business rates regime, driving a ‘nail in the coffin’ on the high street.
The Government will delay a second announcement on reform. The commercial property tax has been blamed for high street woes – retail pays a quarter of rates despite making up 5 per cent of the economy.
Helen Dickinson, of the British Retail Consortium, said: ‘Every week of delay is a nail in the coffin for high streets as four in five retailers say they are likely or certain to close stores.’
A consultation into the ‘broken’ system finished in September last year, and the Government was expected to announce its plan at Wednesday’s Spending Review, following a delay from the Spring.
Pictured: Rishi Sunak, Chancellor, will once again delay plans for overhauling the business rates regime. The government stated that they have not had the time to think about how reform will affect the sector or the long-term effects of the pandemic in high streets.
Groups representing high street businesses are worried that the issue has been pushed into the long grass. However, last night Mail sources said that ministers had delayed reform until a later time.
They stated that they have not had the time to think about how reform will affect the sector or the long-term effects of the pandemic in high streets.
Kate Nicholls, chief executive of UK Hospitality, said: ‘It’s hugely disappointing because root and branch reform has been promised in two manifestos and is very overdue.
‘We would urge the Government to grasp the nettle to reform rates to rejuvenate the high street.’
She added that without reform, rates relief handed to high street firms this year must be extended until longer-term changes are implemented to avoid a ‘cliff edge’ of support.
The Government has been unwilling to make substantial changes to a tax which raises £32billion per year.
However, the high street has long maintained that they are over-taxed. Retailers pay 25% of all rates even though they make up only 5% of the economy.
Rishi Sunak is looking into a 2 percent digital services tax to level the playing field between the high-street and online giants. This could be announced as early as this week.
But the measure is opposed by many large retailers, including Marks & Spencer, who say it is wrong to introduce a new levy on an already over-taxed industry.
They have suggested reducing business rates by around a third, and replacing it with an increase in corporation tax – a tax on a company’s profits.