You wouldn’t think it, given the size of his business, but Green is rooting for the little guy. He has criticised the Treasury for operating a system that means the retail sector contributes the same amount in tax each year, regardless of how well the high street is doing.
He’s got a point: according to PwC, the tax burden on Britain’s retailers has risen a massive 65% since 2005 – and that with a recession on. Green points out that current business rates are based on company valuations that were compiled in 2008. These rates are not due to be reviewed again until 2015, even though rents and valuations have fallen through the floor.
Green says: ‘You can’t have a market where the rents and valuations have gone to hell, while rates have gone up.’ He adds: ‘[The government is] able to use a mechanism [known as] ‘uniform business rate’ [and] if there is a devaluation or the rent moves downwards they have this mechanism where they can inflate, they can create a value of their own…[They] fix it so they don’t lose any revenue.’
The point, to clarify, is that rates are supposed to track rent, so when times are bad (thus rent and valuations fall), rates fall too. It treats rent as the economic barometer and means retailers get an easier ride with the taxman when the economic climate is tough. But only reviewing them just over once a decade ensures that an entire economic cycle can pass before the Treasury has to give retailers any room to manoeuvre.
Green seems to have had a change of heart since November last year, when he said that he felt retailers should 'stop crying' and get on with it. It’s worth noting that Green also thinks his Arcadia Group’s annual rates bill could drop to around £110m from £150m if such a change was made. And we thought he was being altruistic.
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