Retailers call for action on 'archaic' rates system

A war of words has erupted over the issue as national newspapers have stepped up their coverage of the changes to the way rates are calculated, due to take effect in April.

Latest reports suggest communities secretary Sajid Javid is facing a revolt from his own MPs over his claims that the majority of businesses will see their rates cut or frozen.

But retailers that Retail Week has spoken to appear more concerned about the long-standing imbalance between traditional bricks-and-mortar businesses and etailers.

Morrisons chairman Andy Higginson said: “It was a tax that was developed in medieval times and it’s out of date.

“We are not looking to pay less tax, but what we are looking for is a level playing field.”

He added: “At the moment online retailers can base themselves in Luxembourg and sell from there and can gain an advantage over hard-pressed physical retailers.”

Fat Face boss Anthony Thompson agreed that action was required.

“The real issue is that the high street has been struggling for years as online sales have grown,” Thompson told Retail Week.

“It would be fairer all round if the archaic system of rating businesses based solely on property was redesigned to better reflect the multichannel world we live in.”

Reports last weekend claimed that Amazon will see business rates cut at six of its nine warehouses across the country.

Thousands of retailers, pub and restaurants are due to see a rise in their business rates when new rateable values take effect in April. However some – including Mountain Warehouse – have said overall they will see their rates fall.

Ann Summers boss Jacqueline Gold said the changes will be “about neutral overall” for her firm financially.

But she added: “The business rate system is in drastic need of a shake-up.

“In my view the only fair solution would be to move to a turnover-based approach, breaking the link [with] the value of a premises and instead focusing on the nature and activity of the business occupying it.”

Chancellor Philip Hammond has reportedly told MPs he is “listening” to concerns, ahead of next month’s Budget.