The Booksellers Association of the United Kingdom & Ireland Limited

BA addresses the Treasury Select Committee on the Impact of Business Rates.

Meryl Halls

The Booksellers Association (BA) addressed the Treasury Select Committee today as part of the Committee’s Consultation on the Impact of Business Rates.

Meryl Halls, Managing Director of the BA, addressed the Committee on behalf of the BA and its membership, highlighting the ways in which the present system of business rates has allowed an uncompetitive, unbalanced and unfair framework to develop across the book trade and more generally across retail.

Meryl Halls put forward that fundamental business rates reform must be undertaken as part of a wider reform of the whole system of business taxation to make it appropriate for the twenty first century.

Meryl Halls, MD at the Booksellers Association, said: "On behalf of our members we are encouraged that the Treasury Select Committee is holding an inquiry into Business Rates. They seemed genuinely interested in the workings of the tax, how it impacts individual bookshops, and how we might improve it. Appearing in front of the committee gave us a chance to spell out again that the business rates system is an analogue system for a digital age, in need of fundamental reform. We were able to give some of the most egregious examples of the present system – including Brooks in Pinner, who found their rates bill doubling and a backdated arrears payment demand, with no warning. Or the number of closures – or non-openings – of bookshops due to the heavy burden of rates on a business. This failing system makes the job of booksellers that much harder.

“Booksellers on our high streets face ongoing unfair competition from on-line only retailers such as Amazon who are able to profit from an out of date business taxation system that fails to acknowledge the changing shape and scope of the 21st century high street.  This enormous disparity contributes to a system that hands Amazon a huge competitive advantage before a single customer has been through the door. BA members are paying on average eleven times more in business taxes per £100 of turnover than Amazon. The unfairness in this needs to be urgently addressed.

"Bookshops across Britain contribute so much to their local communities and proudly pay taxes to keep those communities viable and well-resourced, but it seems long overdue that the government looks to create a fairer, more up to date system is devised that levels the retail playing field for the UK's hard-working booksellers."

In its submission to the Treasure Select Committee, the BA put forward that:
⦁    The retail industry accounts for 5% of GDP yet pays 10% of all business taxes and 25% of all Business Rates. This year the Business Rate multiplier higher rate will rise above 50 pence in the pound for the first time – its highest ever rate. The BA believes the multiplier must be frozen
⦁    In the internet age, multinational online retailers should not be able to shifts costs and sales from country to country so that they obtain a competitive advantage over national businesses. Neither should multinational online retailers be permitted to pay disproportionately low business rates for operating from huge out of town distribution centres which are virtual department stores rather than the very high business rates that high street retailers are required to pay.
⦁    The Treasury has in the past introduced a series of reforms and reliefs to mitigate the impact of Business Rates, and the BA has welcomed many of these. However, the BA considers that the need for so many reforms illustrates that the Business Rates system is flawed at its heart.
⦁    The Business Rates system is contributing to store closures and job losses and is stalling the successful reinvention of high streets.
⦁    The UK needs a taxation system that is more equitable and distributes taxes more evenly across the economy.