Recommendation 113

Regarding the specific impact on high streets, we heard that the business rates system “penalises town centre uses compared with out-of-town premises” as rateable values (used to calculate the amount of business rates owed) are often far lower in out-of-town centres. 224 Furthermore, Mr Weedon highlighted that the targeting of reliefs can change what types of stores are more likely to be present on a high street, saying that the increase in charity shops in towns “shows that low business rates can definitely produce a large market of small businesses … in towns”. 225 Charity shops receive exemptions from business rates alongside often having lower staff costs owing to the use of volunteers. 226 Another specific example was the permanent Empty Property Relief for listed buildings, which the National Association of Local Councils (NALC) suggested may encourage owners to keep them empty. The process for rates revaluation and time limits on the Empty Property Relief were also cited as barriers to converting the upper floors of retail space to housing and repurposing large retail units. 227 Finally, local markets, the majority of which are run by local authorities, are subject to business rates. Outside the Greater London Authority, legislation governing local authority finances prevents a local authority from providing business rates relief to a market it owns and operates. 228 Mr Wilson argued that this disparity was unjustified and that “some sort of consideration [should be] given to the position of markets, given their role in the local community”. 229