Scrap business rates to boost high streets and make landlords pay, urges report

Experts fear more shops could close because of business rates (Image: Getty Images)

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Business rates should be axed to boost high street shops after the coronavirus pandemic, a report recommends today.

Scrapping the tax would help revive traditional “bricks and mortar” retailers in the wake of the Covid-19 crisis, according to a think tank.

Shops were already battling competition from cheaper internet retailers with lower overheads before the public health disaster hit.

Demos calls for a “landlord levy” so property owners are responsible for pumping cash into the Treasury rather than struggling store bosses.

“As we emerge from the Covid-19 pandemic, our high streets are in a desperate state, and with rising public spending and an ageing society, the Government urgently needs more tax revenue to ‘build back better’,” Demos says.

Retail bosses hope to encourage more people into village, town and city centres when all coronavirus restrictions are eased from July 19
(Image: Greg Martin / Cornwall Live)

“The Government should provide a boost to retailers on the high street by shifting the burden of business rates from retailers to landlords.”

The Time for Change study, based on 20 interviews with tax directors at large businesses with UK operations, says the existing business rates regime deters investment in buildings.

Switching to a landlord levy “would shift the administrative burden of paying business rates from tenants to landlords and would remove existing disincentives to invest in buildings”, it says.

Report author Ben Glover, Demos's deputy research director, said: “Business rates aren’t the main reason high streets are struggling, but they don’t help either.

High streets suffered during the pandemic
(Image: Empics Entertainment)

“They punish shop owners for investing in their premises and their inflexibility means businesses in many places are paying more than they should have to.

“The political toxicity of business rates also means that no sane minister would ever try to raise them.

“But shifting the burden to landlords – who are viewed less sympathetically than shop owners – would relieve hardworking retailers of tedious bureaucracy and open the door to raising additional tax revenue from businesses.

“This is vital if ‘building back better’ is to be paid for.

“It’s time to scrap business rates and replace them with a landlord levy, paid by landlords and based on land values.”

The Mirror has waged a High Street Fightback campaign to fight for our village, town and city centres.

A Treasury spokesman said: “We’re conducting a fundamental review of business rates, and have already set out proposals for more frequent revaluations of properties, ensuring bills more quickly reflect changes in the economy.

“The review will conclude in the Autumn.”

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