Autumn budget opportunity for rates reform
UK retailers are proven to be overtaxed in new research by the British Retail Consortium (BRC) who are lobbying Goverment to reform rates in the Autumn Budget.
According to new BRC data, the retail sector pays 7.4% of all business taxes (£33bn), a share 1.5 times greater than its share of the overall economy (5% GDP).
This bill amounts to 55% of the industry’s pre-tax profits, the highest proportion, along with hospitality, of all main business sectors. Of this total tax bill, 11% of profits is made up of business rates, the highest of all business sectors.
- “Our research conclusively proves what retailers have known for years: the industry is paying far more than its fair share of tax," says BRC chief executive Helen Dickinson.
"The impact of this is clear to see on high streets across the country, with shops shut, jobs lost and a social as well as economic cost. The rates bill also means missed opportunities as other investments, which would drive growth in the longer term, don’t happen," she says.
The BRC is pressing the chancellor to follow up the statement in the Labour pre-election manifesto: "The current business rates system disincentivises investment, creates uncertainty and places an undue burden on our high streets.”
The UK has lost 6,000 shops in the last five years, says the retail organisation. In two-thirds of these closures, business rates had a material impact in the decision-making process.
“The Chancellor has a golden opportunity to fix this situation and use the scale of the industry to help deliver some of the government’s priorities," says Helen Dickenson. " Introducing a 20% Retail Rates Corrector would be a decisive move that levels the playing field between different sectors of the economy and is the best way to achieve the government’s commitment of a tax ‘fairer for bricks and mortar businesses’. It gives an immediate return allowing retailers to move further and faster with investments that play a critical part in driving growth, and in restoring our high streets right across the country.”
