Next boss calls for business rates reform as Sunak delays government review

Wolfson suggested the level of tax being paid by shops is “unfair” and proposed a 50% hike in the business rates bills of warehouses to “fairly reflect the value” of commercial properties in the digital age.

His plea for an urgent and radical change to the business rates system came just hours before it emerged that chancellor Rishi Sunak was set to delay the findings of his “fundamental review” into the tax.

According to the Financial Times, Sunak will argue later today that postponing the report until the autumn will allow him to make decisions once the economic uncertainty caused by the pandemic has eased.

Retailers have long been lobbying the government to revamp the business rates system, which companies have described as “archaic”.

The Treasury promised its fundamental review of rates last March, but retailers have been left frustrated by a lack of movement almost a year on.

Wolfson is the latest in a string of high-profile retail leaders to urge the government to take action.

Writing exclusively for Retail Week earlier this month, Dixons Carphone chief executive Alex Baldock said raising rates for warehouses could save the high street.

Offering a similar argument to the BBC, Wolfson said: “In-store sales at Next have gone down 25% since 2015 but our rates on those properties have gone up 9%. They have become unfair because they no longer reflect the value property against which they’re charged.

“Rents on shops have been coming down, rents on warehouses have been going up and the rates don’t fairly reflect the value of warehouse property either. So I think the government can fund some of this by increasing rates on warehousing by around 50%.

“Over the next year or two, having the rates set at a level that is economic and fair is going to make an enormous difference to how many shops stay open in the short term. And it would be a shame for a huge number of shops to shut unnecessarily because rates are too high.”

Wolfson also dismissed the notion of an online sales tax – one of the ideas being considered by the government.

He suggested such a move would “put a hole in consumers’ pockets” rather than “get people back” to the high street.

Retailers, as well as hospitality and leisure businesses, have been offered business rates relief during the pandemic, a policy that is due to end on March 31.

Sunak, however, is expected to announce an extension of the rates holiday as part of his budget on March 3.

The Scottish government said earlier this week that it would extend its business rates relief for a further year in light of the ongoing Covid-19 crisis.