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Retailers warn 3.2 per cent rates hike is far too much
RETAILERS have been left reeling at the prospect of another major hike in business rates.
The levy is set to go up by 3.2 per cent next year and experts are warning it could be the final straw for many of Oxfordshire’s dwindling number of independent stores.
Ian Middleton, who owns Argenteus jewellers in Oxford, pays £25,000 a year in business rates for his 204 sq ft shop in Cornmarket Street.
Next year’s rise will add £800 to his annual bill. On top of that, he also pays £58,200 a year in rent.
He said: “Two years ago it went up by 5.6 per cent and during that time we have had a double-dip recession.
“Rents have gone up dramatically over the past 10-20 years and that has driven rates up It’s pushing retailers to the limit.
“Coming on top of everything else, this rise in business rates, particularly for smaller retailers, could be the end for them. But this government doesn’t seem to get it.”
Mr Middleton, who runs a second shop in London’s Covent Garden, points to the fact that business rates are based on property valuations carried out in 2008, as the market peaked.
Retail expert Dr Jonathan Reynolds, an academic director at Oxford University’s Said Business School, said: “It’s a sizeable increase in costs at a time when the retail industry hasn’t fully recovered from the recession.
“It’s going to put at risk businesses that would otherwise have been able to get through next year.”
The annual rise in business rates is based on the retail price index (RPI) measure of inflation and the size of the company’s property.
And September’s RPI, used to calculate the annual rise in business rates, has just come in at 3.2 per cent, according to the Office of National Statistics.
Graham Jones, of Oxford traders group Rox, believes one of the main problems is that September is traditionally one of the busiest months of the year with stronger retail figures than at other times.
He said: “We have to get the message across to the Government that if they use these figures, it could cause untold damage to retail in Oxford.
“It’s squeezing the profitability of all retailers but particularly independents and we’ve had a reduction in the number already.”
Despite protests from trade bodies such as the British Retail Consortium, the Government has made it clear on several occasions that it will not reconsider.
Brandon Lewis, the Government minister responsible for town centres, said: “The Government recognises business rates are a big burden for small firms, which is why we extended small business rate relief and introduced new powers for councils to introduce local business rate discounts.”
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