Government Business Rates Income Forecast to Reach £23.8bn by 2018

Written by Leah Myers

ACS has responded to figures published by the Department for Communities and Local Government, calling on the Chancellor to make business rates fairer for the convenience sector.

The Department has forecast net business rates income to rise from £22.4bn in 2015-16 to £23.5bn in 2016-17 and then 23.8bn in 2017-18.

Research published in the Times has suggested that many internet distribution warehouses are set to see their rates bills fall as a result of the revaluation, while one in three convenience stores face an increase in business rates in April.

ACS chief executive James Lowman said: “While the current business rates system provides relief for some of the smallest stores, one in three convenience store retailers are set to see their rates increase as a result of the revaluation. We do not believe the current system is fair, and have called on the chancellor to look at whether the rates bills for internet distribution warehouses are appropriate when compared to their high street counterparts.

“The current business rates system also penalises rate-payers that want to invest in their store to improve their offering for customers. We want to see a rates system that incentivises investment and allows stores to offset investments against their rates bills.”

The figures from DCLG also shows that the Retail Rate Relief introduced at £1,000 per store in 2014 and then increased to £1,500 per store in 2015 delivered over £492m of rate relief for properties with a rateable value of less than £50,000, before being scrapped last year.

In its submission to the Budget, ACS has called on the Government to make the rates system fairer for retailers. Measures called for include:

  • Extending the rateable value threshold for Rural Rate Relief to allow more petrol forecourt sites to qualify for support
  • Bring forward the change in the annual indexation of the business rates increase from RPI to CPI to 2018 instead of 2020, delivering an annual rates reduction of £370m
  • Review the turnover based model for calculating business rates for forecourts and ATMs, and review the appropriateness of the rates bills of internet distribution warehouses compared to their high street counterparts

The full submission is available on our website here.

The figures from the Department of Communities and Local Government are available here.

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