The ACS has followed the Co-op in calling on Rachel Reeves to fully implement a proposed business rates discount for small shops.
The trade body is demanding the Chancellor goes as far as possible in her autumn budget to support convenience retailers, who it says are struggling with additional costs heaped on them in last year’s statement.
Higher rates this year, along with increases in National Insurance and the national living wage, have piled £612m in costs on convenience retailers, whose ability to invest now depends on business rates reform, according to the ACS.
Legislation passed earlier this enables Reeves to cut business rates for smaller retail, hospitality and leisure (RHL) premises and pay for it by increasing rates for all larger business properties. Shops with a rateable value below £500,000 are in line for the discount, while all business properties with a rateable value of £500,000 or more value fall into the proposed higher tax band.
The ACS is calling on the Chancellor to implement the maximum discount possible, by setting the business rates multiplier for RHL properties rated under £500,000 at 20p less than the standard business rates multiplier.
“Anything less than the full 20p reduction would not result in meaningful savings for local shops,” said an ACS spokesperson.
The planned reforms are to replace business rates relief for RHL, which was introduced in response to the pandemic and stands at 40%, with a cap of £110,000 per business.
ACS chief executive James Lowman said: “There are significant changes coming to the business rates system next year, with retailers bracing for the impact of the revaluation and expecting a reduction in the 40% retail and hospitality relief that has remained in place this year.
“Retailers need certainty about what they’re going to be able to invest in next year, so we urge the Chancellor to ensure that unnecessary hikes in business rates bills don’t get in the way of growth.”
The ACS’s call on business rates follows a similar demand from the Co-op, which warned 60,000 small shops could close unless the reforms are delivered in full. “As we approach a critical autumn budget, there’s a real danger that the voices of small shops, and the communities they serve, are not being heard,” said Co-op Group CEO Shirine Khoury-Haq today.
Pressure mounting on Reeves
With the budget looming on 26 November, Reeves is under mounting pressure from retail to make large stores exempt from the planned higher rate while going ahead with the maximum proposed discount for smaller shops.
The reforms were proposed by the government as a way to level the playing field between the high street and online giants, but the BRC has campaigned against plans to charge large stores more, claiming 400 will be put at risk of closure.
Reports earlier this month suggested Reeves was poised to bow to pressure to exempt large shops from the higher tax band, after a meeting with the chiefs of major retailers including supermarkets in September.
The BRC has argued the Chancellor should fund the discount for smaller RHL premises by increasing rates for the largest business properties in sectors other than retail, such as office blocks.
In evidence submitted to the Treasury ahead of the budget, the ACS also has called for called for extra funding for Trading Standards teams across the country to properly enforce against rogue traders of vapes and alcohol. “Age-restricted products like tobacco, vapes and alcohol all suffer from a widespread illicit market facilitated by rogue sellers that have no fear of intervention from enforcement authorities,” said the spokesperson.
Lowman added: “Responsible retailers deserve to be backed by an enforcement regime that acts as an effective deterrent against the sale of illicit and illegal products. Trading Standards and enforcement teams desperately need more funding to be able to put a stop to the rogue traders that are currently operating without fear of reproach.”
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