RECENTLY there have been announcements that the Government will look at the business rates on commercial property, in particular that relating to business rates on shops, as pressure groups have suggested that the present rating system is outdated.

One of the measures being looked at is a possible discount for over 300,000 small retailers of £1,000, and details of this may be announced in the Government’s Autumn Statement.

The problem also nowadays is that many retailers are relying more and more on online sales, rather than high street outlets such that the rating system on shops is now regarded as being outdated, and many retailers would agree with this.

It is understood that the coalition is planning to release a discussion paper on the future of the tax in the spring and the Prime Minister has suggested that radical changes in the business rate system are needed.

The problem is that as business rates raise approximately £24 billion a year, that to try and find an alternative which will satisfy everyone is not going to be easy. One suggestion as far as retailers are concerned, is that rather than rating a property there should be a sales tax, although this may well be met with opposition by some large retailers.

It may also be suggested that the impact of rates on retail property is preventing perspective occupiers from taking properties and currently is encouraging more and more retailers to use the internet, rather than having the overheads of a shop. The effect of this is seriously affecting the occupancy rates of high street shops.

Whichever way the Government considers as an alternative, it is not going to be easy to deal with this matter, but some large retailers have agreed that the present rating system of taxing by property is no longer fit for purpose, and it is punishing retailers unnecessarily.

Whereas alternatives are being looked at, there is not going to be a quick fix to this problem, and it may well be that there would have to be a long transition period if changes are approved.

Already with the recent flooding, relief is being given to some businesses which are affected by the flooding and this is perhaps going to help focus the government on the rating system.

Certainly in Wyre Forest the effect of empty shops on the town centre is still affecting any economic recovery in the area and any incentives from the government which will help encourage occupiers to take shop property, will be welcomed.

In the towns of Bewdley and Stourport the un-occupancy rate of shops is less, but again incentives for retailers to occupy shops would be welcomed.

The empty business rates charge on industrial and commercial property is also hard on landlords who have tried to let their properties during a difficult economical period and any rate relief on empty properties would also be welcomed and give landlords the opportunity to offer incentives to get properties occupied.

JOHN ANDREWS FRICS MARLA, DOOLITTLE & DALLEY LLP