Travel agency bosses have joined a chorus of chiefs from 50 national retailers appealing for reformation of the business rates system to “create a tax regime fit for the 21st century”.
Asda, Sainsbury’s, Marks & Spencer, Iceland and River Island were among the high street giants to co-sign a letter to chancellor Sajid Javid last week, calling for a “fundamental” shake-up of the taxes paid by firms on the properties they occupy.
Spearheaded by the British Retail Consortium (BRC), the letter outlined a number of recommendations, including a freeze of the business rates multiplier, which is used by the government to increase the tax to account for inflation.
It also called for a more efficient appeal process and “improvement relief” for shops spending money to upgrade their premises.
The BRC said rates had risen 50% since its inception in the 1990s and 20% in the past decade. Tariffs were last re-evaluated in England and Wales on 1 April 2017.
Dominic Curran, property policy advisor at the BRC, told TTG that second to Brexit, high business rates were “the biggest issue facing our members”.
In response to the campaign, an Abta spokesperson agreed the system was “in need of modernisation” to ensure it “adequately reflects all business models”.
Miles Morgan, managing director of Miles Morgan Travel, which currently operates 16 branches, branded the tax in its current format “archaic”.
“The system just isn’t working. Rates are too high and based on property valuations that aren’t up to date, so there is a massive disparity,” he said. “It would only take MPs to walk through their local town centre to see the high street needs a lift.”
Nick Harding-McKay, managing director of Travel Designers in Balham, pointed out the tax relief his business received in 2017 enabled him to increase staff hours.
Lee Hunt, owner of Woodbridge-based Deben Travel and Cruise Ready, said despite his business’s rates falling in 2017, the amount it pays for its two premises “is still extortionate” – about £12,000 per year.
“We like being on the high street, but you just can’t compete with the overheads of other business models online with rates at the level they are now.”