Intu, which owns and operates many of the biggest and most popular retail and leisure destinations in the UK, including the Trafford Centre in Manchester, has welcomed the Chancellor’s review of business rates but said the current levels have curtailed investment by owners of retail property.
It said the multiplier used by the Government - currently at 49 per cent of a property’s rateable value - is at an extreme level in terms of its impact on companies’ ability or willingness to invest and grow in the UK retail sector.
Corporation tax has reduced from 34 per cent in 1990 to 20 per cent, but the business rate multiplier has risen over the same period from 35 per cent to 49 per cent.
David Fischel, chief executive of Intu, said: “We are not opposed to the principle of a property tax but the excessive level is making the UK less competitive and less attractive for retail investment.
“It means that hen considering expansion plans, international retailers are more likely to open overseas than expand throughout the UK, meaning that the regions outside of London are particularly hard hit by the high levels of business rates.”
Intu also said the Government’s initiative to devolve additional powers to major regions of the UK outside of London, which it supports, will be jeopardised without a thorough reform of business rates.
And it has made a number of other recommendations including more frequent revaluations of rateable values, improved use of technology, a move away from the link to RPI and has agreed with the recommendations of other parties in relation to empty rates and the mechanics of transitional relief.
In owns and manages regional shopping centres in the UK and Spain and is well placed to compare the regimes in each country.
It says that comparing Government revenues from taxes on property as a percentage of GDP in the two countries, the level is just over four per cent in the UK, and around two per cent in Spain.