“John Lewis, the embattled retailer whose profits collapsed by 99% in the six months to July, will be charged £10.5m in business rates for its flagship Oxford Street shop from April, according to new figures — a 60% rise in three years.
A short walk away, Selfridges’ flagship shop also faces a 60% hike: its business rates bill will climb to £17.5m. That figure is almost four times the total UK corporation tax paid last year by the online retail giant Amazon: just £4.5m.
The looming threat to the high street will put pressure on the chancellor, Philip Hammond, to throw businesses a lifeline when he delivers his budget on October 29.
This weekend, Helen Dickinson, the chief executive of the British Retail Consortium (BRC), said: “These figures lay bare the shocking burden the business rates regime places on British retailers, who make up 5% of the economy and pay 25% of business rates — £7bn a year. The rates bill is leading to store closures, preventing the reinvention of our high streets, and is damaging communities the length and breadth of the UK.”
The BRC is lobbying for a two-year freeze in business rates until a revaluation in 2021, while the New West End Company, which represents businesses in London’s West End, is lobbying for a rates reduction of £5bn. This would be financed by a 1% tax on online businesses but would not apply to traditional retailers’ internet sales.
High street trading has been squeezed by online shopping, which now accounts for 18.2% of the market, with fewer stores surviving to shoulder the rates burden.
A phased four-year settlement in 2017 will bite hardest from April, with some stores facing huge increases. Burberry, which this month unveiled a new collection, faces a hike for its London headquarters of 186% compared with its rates in 2016-17.
In Manchester, Zara must pay £1.26m and Manchester City football club £2.4m, up from £1.7m in 2016-17.
Altus Group, the property adviser that researched the figures, found NHS hospitals will have to pay £386m and council-controlled state schools £957m.
Nickie Aiken, the Conservative leader of Westminster council, said: “Our taxes should reflect our way of life. I would ask the Treasury: do we want to continue the decline so that the only things left on the high street are charity shops and betting shops?”
Source: Sunday Times (pay wall)