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AOP position

Business rates

The current system is unfair and needs reform

Background

Business rates are a tax on property used for non-domestic purposes, including premises used to provide healthcare services such as community optical practices. Some small businesses are eligible for reductions in business rates1. However, business rates often represent one of the highest costs for optical practices after staff and rent.

There is growing concern that online-only businesses have an unfair advantage over traditional ‘bricks and mortar’ ones, because they do not pay business rates. The Federation of Small Businesses (FSB) says that the current business rates system is ‘out-dated, unfair and not related to the ability to pay, or changing economic circumstances.2’ The Confederation of British Industry and the British Retail Consortium are also campaigning for the reform of business rates. 

What we are calling for

We agree that the business rates system needs reform, to create a fairer regime that reflects the current retail landscape. 

Optometrists working in community optical practices are high street heroes, providing essential health services. They deliver over 13 million NHS-funded sight tests in England each year, and another seven million private sight tests. These sight tests are crucial in detecting eye diseases, most of which are asymptomatic in their early stages. 

Many community practices across the UK also provide other NHS eye care services, including treating minor eye problems and monitoring patients with chronic eye conditions, such as glaucoma. This takes pressure off other parts of the NHS and provides a more convenient, local service for patients. 

NHS fees have been frozen for several years, and do not cover the costs of delivering sight tests. Optical practices therefore subsidise these services by selling glasses, contact lenses and other goods. This is not a sustainable model for delivering core NHS services, and we are also calling for NHS sight test fees to be increased substantially. 

Meanwhile, recent years have seen a steady rise in the number of patients who purchase spectacles or contact lenses online. A 2018 Mintel report said 18% of people had bought glasses or lenses online3. This figure is only going to increase; the same report said that of the people who have never bought glasses online, 45% planned on doing so in the future. 

As consumer habits change and the proportion of people shopping online rather than in physical outlets increases, government must act with urgency to make the business rates system fairer, protect our high streets, and ensure that community optical practices can continue to protect the eye health of local people across the UK.  

References

  1. The AOP’s Independent practice guide has information on eligibility for business rates reductions:  https://www.aop.org.uk/advice-and-support/business/setting-up-a-practice
  2. https://www.fsb.org.uk/standing-up-for-you/policy-issues/local-government-and-communities/business-rates
  3. https://www.aop.org.uk/ot/industry/high-street/2018/03/22/mintel-report-continued-growth-recorded

October 2019

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