Next chief calls for rethink on business rates
The chief executive officer of Next has added his voice to those calling for a business rate reform, claiming the tax on commercial property is accelerating the decline of the high street.
Simon Wolfson, currently CEO of clothing retailer Next and a Conservative Party peer, said the company pays higher business rates than rents on a significant number of its store estates.
In an interview with ITV, he called on the government to reform the tax, which is imposed on commercial property such as shops, factories, warehouses and offices, because it fails to reflect today’s challenges.
“The one thing that I think the government must do is make rates more responsive to today’s reality,” he told ITV News, stating that “the process of failure” in struggling towns and cities is being accelerated by the high business rates.
“There are lots of our shops where we pay higher rates than we do rents,” he continued. “I would have more frequent revaluations, up and downwards revaluations, so the rates are a fair reflection of the value of that property.”
Many high street retailers have complained the tax gives online businesses an unfair advantage, as physical retailers have to pay tax on their stores, which are usually located in prime property locations.
The British Retail Consortium called for a two-year rate freeze followed by reform earlier this month, and several industry experts including retail guru Mary Portas have warned of their impact on struggling businesses.
Demand for retail property has fallen to its lowest level in nine years, according to the RICS UK Commercial Property Market survey.
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