The Welsh Retail Consortium is calling on the next Welsh Government to take a proactive approach to radically reform the outdated business rates system, and make Wales the flagship nation in addressing the need to provide a more supportive business environment.

Following the revaluation of business rates by the Valuation Office Agency, which comes into effect on April 1, 2017, current predictions are showing that the projected rate poundage for Wales could jump by a staggering 10 per cent – making Wales the highest taxed and least attractive place to do business in the UK-based on our rates system.

Unlike England, Wales does not benefit from having the buoyancy of London given that business rates are devolved to the Welsh Government.

Wales will need to decide whether it can afford to have a considerably higher poundage rate compared to England and Scotland, and what implication this might have particularly on the retail industry where footfall has seen a more dramatic decline across our high streets and there have been, and are predicted to be, high rates of shop closures. The current shop vacancy rate stands at almost 14%, and the projected rate of store closures is higher in Wales than anywhere else in the UK over the next two years.

With recent reports showing that we’re likely to see 900,000 fewer retail jobs across the UK over the next decade, and combined with cumulative impact from the introduction of the Apprenticeship Levy and the National Living Wages, retailers will be having to find an approximate additional amount of £14bn over the next four years if business rates are left unreformed. And this cumulative burden will hit hardest in areas such as Wales, particularly in light of the projected poundage increase.

Business rates were devolved to Wales in April 2015 and the Welsh Government has the power to take an innovative approach to addressing the challenge of the outdated rates system, suggests Head of the Welsh retail Consortium Sara Jones.

She said: "The WRC is calling for fundamental reform of business rates for all, whether that be small, medium sized or larger businesses. What is abundantly clear is that the current system is not fit for purpose, is deterring investment and leading to shop closures and job losses. Instead of creating winners or losers or more complexity, the focus should be on more regular revaluations, an immediate cap on the multiplier and timetabled plan for a gradual reduction in rates to 1990 levels.

"With the retail industry employing 130,000 people in Wales our members are making a key contribution to the local economy. To ensure we see future investment in Wales and the development of this key industry, now is the time for us to look at radical reform for all those who face the burden of an outdated rates system."

Helen Edwards, business rates expert in Gerald Eve’s Cardiff office, said: “Unless the Welsh Government is prepared to accept a cut in business rates revenue following next year’s revaluation – an unlikely scenario, given the existing strains on local authority finance – we forecast that the Uniform Business Rate in Wales will need to be well over 10 per cent greater than that likely to apply in England.

“In practice, this means that shops on the hardest-pressed Welsh high streets will face a rate of tax well in excess of 50 per cent and considerably above that paid by the luxury retailers of London’s Bond Street. This shows more than ever just how urgently business rates reform is needed.

“To fail struggling businesses in such a manner is another nail in the coffin of the high street and only reinforces the need for genuine business rates reform.”