According to a recent report by the Centre for Retail Research, the retail sector in the UK has witnessed an alarming loss of 645,204 jobs over the past five years. This is a concerning figure, with 105,727 jobs being lost just last year. The furlough scheme has played a role in reducing the number of job losses compared to previous years. The situation is further exacerbated by the closure of 72,580 stores across the country since 2017.

High streets, in particular, are facing a significant challenge due to the increase in business rates. Though they benefited from tax breaks during the pandemic, they are now expected to face a substantial rise in rates. Industry experts are urging the government to handle the issue of business rates cautiously to safeguard the future of UK high streets.

In April 2023, there will be a revaluation of approximately two million commercial properties for business rates in England. While the intention of revaluations is to maintain revenue neutrality, they inevitably lead to winners and losers, resulting in significant changes in tax liabilities. Altus Group, a real estate adviser, has revealed that, based on the previous scheme introduced during the last revaluation in 2017, the retail sector would have missed out on £1.28 billion in tax reductions, with the Northwest region losing out on £611 million in reduced bills.

Experts have warned that the upcoming revaluation must not hinder the potential for reductions in certain areas. Robert Hayton, the UK president at Altus Group, argues that reducing support for struggling sectors and regions, where rents have considerably dropped, would hinder their chances of recovery and rebuilding. This approach would be counterproductive and would not contribute to the goal of leveling up prosperity.

Given the current state of the retail sector in the UK and the impending challenges of increased business rates, there are growing concerns about the future of high streets. It is essential for the government to adopt a cautious approach in determining business rates levels to support the recovery and ensure the long-term sustainability of the retail industry.

Useful links:
1. Centre for Retail Research – Shopping 2023
2. Altus Group – Retail sector would have missed out on £1.3bn/€1.1bn had Rishi Sunak not imposed that tax hike