Business rates need proper reform, not half-hearted tinkering at the edges, warns NHBF

The National Hairdressers’ Federation has expressed dismay at the narrowness of a government discussion paper designed to open debate around the reform of business rates – but is nevertheless urging salons to get involved and make their voices heard.

The discussion paper, Administration of business rates in England, published this month (April) has set out a number of questions for businesses and others to consider about the future of business rates.

The paper is designed to generate discussion ahead of the government’s stated aim of reforming the business rates system after the next revaluation, which is due in April 2017.

Business rates are charged based on the property value of a shop or other commercial property.

The NHBF has long argued the current system, which dates back some 400 years, no longer reflects the modern reality of the high street, with town centres nowadays having to compete with online retailers, who do not pay business rates if they have no physical premises, and out-of-town shopping.

The current system has also been criticised by business leaders including Sainsbury’s boss Justin King and former Tesco chief executive Terry Leahy, among others, who have argued it puts property-intensive businesses at a competitive disadvantage.

In March, the House of Commons Business, Innovation and Skills Committee urged the government to examine whether a system based on retail sales would be fairer.

But the discussion paper makes it clear ministers have already ruled out this idea, arguing the government believes rates “should continue to be based on rental property values”.

NHBF chief executive Hilary Hall said: “The discussion paper is looking at some useful areas, such as the way rates should be set and collected. But it is missing the bigger picture. In the internet age the whole premise of a system solely based on property values is outdated,” she said.

“Any reform of business rates needs to start with debate about how to create a fairer system that better reflects the modern high street and extend from there, not shut off the option of wholesale reform before the process has even started,” she added.

The discussion will run until June 6 and, despite its narrow remit, Hilary urged hairdressers, barbers and beauty salons to get involved and express their views.

Paul Curry, NHBF’s President said, “You can’t get a haircut online, and that means hairdressing as an industry has a fundamental role to play in any discussion about the future health and vibrancy of the high street. It’s important salons make their voices heard”.

The NHBF is surveying members for their views between now and May 24.
The survey can be accessed here: https://www.surveymonkey.com/s/businessrate

Alternatively, the discussion paper can be downloaded at: www.gov.uk/government/publications/business-rates-administration-review-discussion-paper and responses submitted directly to the government via email to: businessrates.review@hmtreasury.gsi.gov.uk.