UK retail pleads for new Budget measures, keeps fingers crossed
The UK’s spring Budget will be delivered by the Chancellor of the Exchequer on Wednesday and retail insiders know what they want to see from it — a relaxation of Sunday trading rules and reform of business rates.
It’s interesting that two statements released on Monday that are calling for change didn’t also ask for the return of VAT-free shopping for tourists, perhaps because they see the chances of that happening as slim.
Bodies representing the West End and Knightsbridge have appealed to the government to add them to the list of exemptions to the 1994 Sunday Trading Act.
The figures show that Sunday is the busiest shopping day in the two central London districts by footfall per trading hour, so extending Sunday trading hours “would generate a significant amount of additional sales while supporting thousands of jobs”.
That’s according to the New West End Company (NWEC) and Knightsbridge Partnership that have submitted a joint Budget representation to the Treasury.
As the UK’s only two statutorily designated International Centres, both districts are key for international shoppers and are among the reasons those visitors even think about coming to the UK.
VisitBritain estimates that over 25% of the £28.4 billion spent each year by international visitors UK-wide is on shopping, with the majority in the West End and Knightsbridge.
But the two destinations are currently competing with an increasing number of global shopping districts, such as Paris, Milan and New York, alongside newly emerging retail districts in the Middle East, which face fewer trading restrictions.
There are no Sunday trading restrictions in comparable areas of Milan and New York, and Paris’s laws “are being relaxed in areas with high numbers of tourists”.
NWEC commissioned research from Volterra that claims extending opening times by just two extra hours in the West End and Knightsbridge on a Sunday would generate an estimated £340 million annually, resulting in £70 million of additional VAT, and supporting over 2,000 jobs.
Meanwhile, real estate specialist Colliers said that its Budget wishlist includes the government cutting business rates and “introducing fundamental reform”.
John Webber, Head of Business Rates at Colliers, said measures introduced last year added up to “a sticking plaster on a gaping wound: the fundamental flaws of the business rates system remain and Budget 2023 is the chance to address them”.
He’s calling for the ‘muliplier’ used to calculate rate bills to be reduced from around 50p in the pound to 34p, saying that “nowhere else in Europe do businesses pay half the rental value of premises in property taxes”.
Colliers also wants to see business rates relief extended into 2024/25, a longer period for empty property rates relief, annual revaluations to more accurately reflect current property values, greater transparency, a repeal of the tortuous appeals system, and more.
Webber said that “what we still need is a well-managed and transparent business rates system, that encourages rather than punishes businesses. In its 2019 Manifesto, the Conservative Party promised, ‘To cut the burden of tax on business by reducing business rates. This will be done via a fundamental review of the system. So far this has not been fulfilled.”
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