A report from the British Retail Consortium (BRC) has predicted that if business rates continue in their current state, over 80,000 shops will be closed within the next two years.
Ministers have warned that a change in shopping habits and a growing burden of taxes, will lead to two out of three town centre shops to close down by 2017, causing a loss of 800,000 jobs.
These figures were based on the scenario of six out of every ten high street retailers who have leases expiring in the next two years deciding not to renew them.
It is predicted that this year, business rates will bring in around £28bn for the Treasury.
These results have prompted the BRC to call out Chancellor George Osborne to avoid this issue by reforming the business rates system which they call “a tax on jobs and growth”.
In last year’s Autumn statement, Mr Osborne advised that he would review the business rates system and deliver his findings by next year’s budget.
Other research, from Verdict, was highlighted by BRC and shows that the presence of town centre shops has decreased from 148,990 in 2004 to the current 129,121, promoting more pressure to the Chancellor.
Even if leases are renewed, the research predicts that there will still be 8,000 less shops on the high street due to the continuous rise of online shopping.
BRC also warned that if 60 percent of stores decided to not renew their leases, then store numbers and job availability would increase 10-fold.
The group want Mr Osborne to help out the small businesses by giving them a tax relief and stop inflation based increase in business rates and conduct property valuations every three years instead of the five to make it fair for retailers.
The BRC report said: “For a government which has advocated pro-growth policies to support business and embed the recover, business rates are an anomaly and stand out in an other moderate tax regime”.
Adding: “It is essential that we work together to design a tax that reflects the economic reality facing businesses.”
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