The rises in the UK’s business rates are hitting luxury retailers hard, this is the first reassessment since 2010 and it isn’t looking good at all. Business Rates (also known as National Non-Domestic Rates) are a tax on business properties. The tax is set by the government and business rates collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services.
The results for most retailers are remarkable, the rateable value of their premises determines the value of the bill. Louis Vuitton’s value has increased from £3.9m in 2010 to £8.5m in 2017 that’s an increase of 118 percent over the 7-year period. Chanel’s has risen by 135 percent and they are now at £6.6m, this information stated by the Financial Times by CVS the business rates consultants.
There have been a lot of similar high increases to business rates, Burberry’s payments are going to rise to £2.8m between 2017 and 2022 with is 197 percent increase, and De Beers’ won’t be far behind at 170 percent inflation.
In the first year, most rates will increase by around 50 percent and these increases are a lot higher than anywhere else in London. There is also a store on Regent Street that is expecting a rise of around 87 percent, and an office building in the city of London that will increase by 34 percent. The consultants at Deloitte are stating that outside of the London area rates are expected to decrease. This alarming increase has spiked a huge amount of business rates appeals over the past year, which is only set to further increase.
A handy infographic created by the Financial Times breaks down the full tax rises for the street and the luxury brands that exist there. Whilst recent news coverage within the UK has picked up signs off business rates reliefs to pubs as well as rural retail shops, the stark contrast in business rates can be seen here as the luxury brands continue to be hit with large taxes.