New business rates are 'madness', Mary Portas warns

Mary Portas warns government over shop closures Credit: PA

The planned rise in business rates will kill off a third of independent shops, Mary Portas has warned the Government.

The "Queen of Shops" said the controversial revaluation would be the worst blow to shops since the 2008 crash.

Once hired by David Cameron to find a way of saving Britain's high streets, she branded the looming hike "madness" and urged Prime Minister Theresa May to scrap the system completely.

In April, business premises are set to be revalued.

Rates will fluctuate depending on these new valuations - so in any area where property values have increased, businesses will pay more tax.

The average micro business, which employs fewer than 10 people, will have to pay £17,000 to cover business rates from April, the Federation of Small Businesses warned.

Portas has added her voice to a growing number of business figures speaking out in protest at the plans.

Writing in the Daily Telegraph, she said businesses risked being "destroyed" by increases in their bills of up to 245%.

She said: "In 2011 I was commissioned by the government to look at how we could save our high streets.

"Six years on and we were really making progress.

"So it's strange to watch our leaders preparing to impose a new business rates revaluation that will cripple high street shops.

"The tax bill, which will hit retailers from April, will be the single biggest blow to independent shops since the financial crisis.

"I would estimate that at least a third of them will die off."

Rise in business rates 'will create ghost towns' Credit: PA

The Government has said the rates, which are calculated on the rental value of commercial property, will decrease for many businesses due to a fall in property values.

Portas warned that a punitive rise will lead to the return of "clone towns" in which "the only 'mix' will be of charity shops, bookies and Costa".

She said: "I am calling on (Communities Secretary) Sajid Javid, (Business Secretary) Greg Clark, and Theresa May to stop this madness before it destroys everything we've been fighting for."

Brigid Simmonds, head of the British Beer & Pub Association, said a proposed cap on business rates for pubs should be lowered.

"They are, to use the Prime Minister's words, 'just about managing'," she said in a letter to The Times.

"Swift action is needed if they are to thrive as beating hearts of their local communities."

Business leaders have also written to the Government to urge a rethink on plans to tighten the appeals process, making it more difficult for firms to challenge unfair increases in their business rates.

Helen Dickinson, chief executive of British Retail Consortium, added: "The fact is that there are more prosperous places around the country. Those places will continue to be successful but the gap between those and the more vulnerable, the more deprived areas, will get bigger.

"More businesses will decide to close in those areas that are not doing so well. The system is just not fit for purpose in the 21st century."