Labour commits to business rates reform

By Liza Helps Property Editor Logistics Matters

CALLING THE current system ‘outdated’ and a ‘punishment’ for high street retailers she hinted that the overhaul would see the government looking to reduce rates for smaller businesses while hiking them for larger multinationals and tech companies.

Business Rates are a property tax charged on all commercial property (with some exceptions) across the UK, which brings in revenue of around £29 billion per year. It has an extremely high collection rate and is relatively cheap to administer. Many have said abolishing it and replacing the tax is a ‘bold’ move.

At the conference there was very little meat on the bones of the statement as to exactly how the overhaul of business rates would be achieved. Although in its manifesto in June this year Labour said that it would replace the business rates system with a new system that 'will level the playing field between the high street and online giants'.

For many, this has been interpreted as seeking to increase business rates on distribution warehouses. Colliers head of business rates John Webber said: ‘“If Labour plans to raise the same amount of money but shield the high street, they will need to collect it from some other sector - such as logistics / industrials or offices. Someone will need to take the pain.”

Back when the Labour manifesto first outlined business rates reform, Home delivery expert Parcelhero Head of Consumer Research, David Jinks warned: “By saying ‘This new system will level the playing field between the high street and online giants’, Labour is in danger of missing the point that many successful businesses, from Next and John Lewis to small local independent retailers, all realise that an integrated High Street and online policy is best. The High Street and online are on the same playing field, playing for the same team.

“It is vital [that] Government recognises that successful companies will have physical stores and distribution warehouses to support their e-commerce activities. Cutting High Street rates by increasing warehouse rates is robbing Peter to pay Peter."