Asda and Boots urge chancellor to reform ‘broken’ rates system

Bosses of more than 50 retailers including Asda and Boots have written to the chancellor urging him to change tax rules to boost the UK High Street.

The group said it wanted him to fix the “broken business rates system”, which it called outdated.

It said the tax had jumped by 50% since the 1990s and had contributed to some retailers going out of business.

The Treasury said it had announced a £3.6bn fund last month “to support our high streets and town centres”.

“The Chancellor will announce further details of the government’s policy programme in the coming weeks and months,” it added.

In the letter to the chancellor, co-ordinated by the trade body the British Retail Consortium, the group pointed out that retail accounted for 5% of the economy but paid 25% of all business rates, a property based tax.

It said this “this disparity” was damaging high streets and “harming the communities they support”.

It said as a result there were a growing number of empty shops, with vacancy rates at a four-and-a-half year high.

‘Considerable strain’

Among other things, the group wants businesses in London and the South East to pay more business rates to take pressure off firms in the North and the Midlands.

However, it also said it wanted to avoid a tax rise overall

“The likelihood of a no-deal Brexit appears to be increasing, which we believe would place a considerable strain on retailers in the UK,” says the letter.

“In this context, the prime minister’s intention to pursue an economic package to boost business and investment in the UK is crucially important; we strongly believe that reform of the broken business rates system should be front and centre of that package.”

Retailers employ three million people in the UK.

That makes the industry the UK’s largest private sector employer, according to the British Retail Consortium.

The industry is not alone in asking for concessions to help it prepare for a potential no deal Brexit.

The UK food industry, for example, has asked the government to waive aspects of competition law to allow firms to co-ordinate and direct supplies with each other after a no-deal Brexit.

On the other hand, government funding to help UK companies cope with a possible no-deal Brexit customs system has had a “concerningly low” take-up, the BBC’s Newsnight programme reported last week.

In December, the Treasury and HM Revenue & Customs unveiled an £8m training fund which companies and trade intermediaries, such as freight forwarders, could apply for, but just 741 companies have applied for the grants.