Open letter to chancellor urges changes ‘to level playing field’ in upcoming autumn statement
More than 70 retail bosses, including execs from WHSmith, The Works, and Oliver Bonas, have signed a letter to the government urging chancellor Rachel Reeves to reform the business rates system in the autumn statement at the end of the month.
The open letter, coordinated by the British Retail Consortium, urges the new Labour chancellor to “level the playing field between industries with a retail adjustment to rates” claiming the industry “pays more than its fair share of tax”.
Signatories from a number of greeting card and stationery retailers, such as grocers Aldi, Tesco, Marks & Spencer, Morrisons, Sainsbury’s and the Co-Op as well as WHSmith, The Works and Oliver Bonas, are asking for a retail rates corrector to be introduced.
This would give a 20% downward adjustment in business rates paid on retail properties to redress the balance that sees the industry pay 7.4%, roughly £33billion, of all business taxes, of which the BRC says a fifth – £6.6bn – comes from business rates charged on all sizes of shops.
The letter to the chancellor says: “The retail industry is the UK’s largest private sector employer, supporting three million direct jobs and a further 2.7million in the UK supply chain, and contributes over £100bn pa to UK GDP.
“The businesses we lead make up the majority of these numbers. We look forward to working with you and the new government and believe that through retail’s scale and reach we can be an important partner in supporting investment and growth across the country.
“Research commissioned by the British Retail Consortium shows conclusively what we have known in our businesses for years: the retail industry pays more than its fair share of tax.
“We pay 7.4% of all business taxes, a share 1.5 times greater than our share of the overall economy, and retail’s tax bill amounts to 55% of pre-tax profits, the highest proportion, along with hospitality, of all main business sectors. Within this, business rates alone equate to 11% of profits.
“This tax burden is having a detrimental socio-economic impact on local communities through store closures and job losses – in two-thirds of the 6,000 store closures in the UK over the past five years, the rates bill had a material impact on the decision to close.
“Rates are also holding back current investments we want to make in pay and upskilling our people, in new and improved stores and in the technology that will support productivity and economic growth.”
