Business rates need ‘fundamental reform’ to reflect reality on the high street, says NHBF

The NHBF has backed calls by an influential body of MPs that Britain’s system of business rates is in need of fundamental reform so as properly to reflect the competition the high street now faces from online retail. 

The House of Commons Business, Innovation and Skills Committee last week described the current system of rates, which are calculated on the value of a physical shop or commercial property, as being based on “an outmoded pattern of retail” and were “not fit for purpose”. 

It urged the government to examine whether a new system based on sales, rather than property, would be fairer, whether the retail sector needed to have its own form of taxation and the frequency with which rates are revaluated. 

All these are concerns the NHBF has long highlighted to government, said chief executive Hilary Hall. 

Hairdressing is a service that cannot be provided online, and therefore hairdressers have no option but to have a physical presence on the high street – and in many cases now act as the focus for their high street. 

It is only right we have a rates system that is balanced more fairly between physical and online retailers and so we very much welcome the committee’s recommendations. There are other practical steps we’d like to see too, such as Small Business Rate Relief being made a permanent relief. 

We do recognise, and welcome, the reforms the government is already bringing in around car parking and the introduction of the Employment Allowance; indeed we are pleased to be working with the government on its Future High Streets Forum precisely to look at ways to revitalise and reinvigorate Britain’s high streets. But fundamental changes to business rates must be part of that reform agenda and debate.”