High street retailers struggling with shaky UK consumer confidence, the popularity of online shopping and increasing wage bills are also being hit with higher business rates — while online retailers see their rates drop.


Business rates have created a very difficult environment for small and medium-sized enterprises. These fluctuating rates are constantly increasing pressure on brick and mortar stores, while simultaneously supplying online retailers with an easy advantage. With the rivalry between e-commerce and high street retailers at its peak, it’s become important to raise the game and push the country’s competitive edge.

According to research by Altus Group, the average rates bill for department stores in England and Wales has risen by 26.6 per cent in 2018/19, with large high street shops seeing their bills go up by 10.8 per cent. This will impact small businesses the most, where their limited turnover will be insufficient to offset financial distress caused by any rise in business rates.

Altus Group’s report urges the government to reform the process and relieve business rate strain from small business shoulders. While government intervention would indeed provide the necessary relief to the small business community, they can also make changes themselves.

At the Credit Protection Association, our debt recovery services free up cash flow that our Members have used to invest in new technology or renovations. This new cash can however also be used to repair holes in cash flow, either made by late payment or financial mismanagement, or by the devastating blow from business rates. The CPA collection staff purge finances of late payers and residual debt, and provide business owners with the financial power to offset even the most disruptive business rate shakeup.

Retailers say that without urgent reform, the higher rates could kill the high street.

A number of retail stalwarts, including Maplin, Toys ‘R’ Us and Poundworld, have gone into administration this year, while others — including Carpetright and Waitrose — have closed stores.

According to the Office for National Statistics, while total retail sales grew 1.4 per cent in 2017, online sales were up 12.1 per cent.

The government has promised to reform the levy but retail bosses say time is running out as the difference between operating from out-of-town warehouses and expensive town centres widens, and high street retailers see profits plummet.

Robert Hayton, head of business rates at Altus, said: “Traditional bricks and mortar retailing is property intensive, leading to a larger tax to turnover ratio and, if left unchecked, could lead to the substantial extinction of the high street.”

Business rates changed in 2017 after the government revalued property for the first time in seven years. But while the revaluation led to higher rates in busy city centres, it reduced them in rural areas and poorer towns, where online retailers tend to have their warehouses.

While businesses await reform from Westminister, businesses should ensure they’re doing their part. Whether they are preparing for a major economic downturn, political shifts or interest or business rates increases, businesses should be prepared. Competent financial and cash flow management is essential for any successful business. While many firms prefer to achieve this within their own four walls, asking for help is also recommended.

Small businesses are the lifeblood of the economy, so their survival is paramount. Unfortunately, the high street is proving a dangerous landscape for firms, with business rates and low profits damaging their business structure. With the government distracted by trade deals with Brussels, businesses should free up cash flow and ensure they have enough financial cushion to survive any further hikes or shifts in the economy. Third-party credit management companies like CPA can aid this reshuffling, so contacting us would be a good place to start.

Here at CPA, we fight to the tooth for our Members, particularly our small business Members who are grappling with a multitude of financial obstacles. We have now created a new department within our company dedicated to getting our members rightly compensated in accordance with the Late Payment of Commerical Debts (Interest) Act 1998. This has unlocked hidden cash and potential for our members and brightened their prospects and confidence within the current business landscape.


Please call us on 0330 053 9263 to discuss how CPA can help your cashflow.
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