Press Releases

• New analysis shows 2023 revaluation could mean £8.5bn boost for retail sector
• BPF calls for immediate action to end ‘downwards transition’ to fast-track tax saving and enable businesses to forward-plan
  
  

The British Property Federation (BPF) has called for immediate intervention to bring forward an £8.5 billion boost for UK high streets if the fundamental reform of business rates is delayed.

Analysis from property advisor Avison Young shows that as a result of the next revaluation the total annual business rates burden for retailers is set to decrease by 26% to £15.9bn from 2023, potentially saving the sector £8.5bn over the subsequent three years. However, the current system of ‘downwards transition’ means businesses will see their rates bill adjusted gradually over several years rather than immediately.

Ahead of the Autumn Budget, and with uncertainty around the longer-term reform of the system, the BPF is calling on Government to act now to end downwards transition, in order to bring forward the tax boost for retailers and ensure the level of rates paid is closer aligned with post-Covid market conditions.

The BPF has been campaigning for fundamental reform of business rates for over a decade, arguing that the underlying level of taxation is simply too high, calling for annual revaluations and an end to the requirement for the system to raise the same amount year after year regardless of economic performance, creating a more agile, flexible and equitable system. 

Melanie Leech, Chief Executive, British Property Federation, commented:

“If, as expected, the Chancellor announces a delay in business rates reform this week, the Chancellor must look at ways to ease the pressure on the high street in the meantime, as we enter a critical phase in the recovery from Covid-19.

“The retail sector could save £8.5bn from 2023 but under the current system it will take many more years for businesses to feel the benefit. We recognise that reforming the system is complex and will take time to implement, but in the meantime an end to downwards transition will mean that retailers can plan for significantly lower occupational costs from 2023, helping them forward-plan and protect jobs. Such is the urgency on the high street we need Government to be bold and pragmatic now, whilst longer-term reform is being agreed.”   

David Jones, Managing Director of Business Rates Avison Young added:

“It is clear from our research that the 2023 rating revaluation cannot come fast enough for the traditional retail sector. Increasingly over the last six years, the tax has changed from simply being a challenging cost across the retail sector to a significant burden, which in so many cases have become increasingly disproportionate against a backdrop of diminishing margins.

“As a result, we would like to see the Chancellor on Wednesday commit to no downwards transition scheme from April 2023. Retailers devastated through changes in consumer behaviour, the impact magnified by the effects of Covid-19, must receive the full benefit of their business rates reduction from day 1 of the new revaluation. They need certainty now that their savings will be delivered and not squandered through this grossly unfair scheme.”

Avison Young’s full analysis of the impact of the 2021 Revaluation is available here.