UK retail industry overtaxed; BRC suggests 20% retail sales corrector

This bill amounts to 55 per cent of the industry’s pre-tax profits, the highest proportion, along with hospitality, of all main business sectors. Of this total tax bill, 11 per cent of profits is made up of business rates, the highest of all business sectors, a BRC release said.

The effect of this tax burden is stark, with shuttered shops and declining high streets in every corner of the country, BRC noted.

This was recognised in the Labour Party’s election manifesto which stated: “The current business rates system disincentivises investment, creates uncertainty and places an undue burden on our high streets.”

The United Kingdom has lost 6,000 shops in the last five years: in two-thirds of these closures, business rates had a material impact in the decision-making process. Without action, up to 17,300 shops could close over the next decade, the BRC release said.

More widely, it is holding back investment in pay and upskilling for colleagues, and in the technology that will boost productivity, support decarbonisation and drive economic growth.

The BRC submission called on the government to introduce a 20-per cent retail sales corrector—a 20-per cent adjustment to bills for all retail properties. This would meet the government’s manifesto commitment to reform the business rates system and to restore Britain’s declining high streets, and would immediately unlock investment and growth, another priority for the government, BRC said.

Introducing this corrector would be a decisive move that would level 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’, said BRC chief executive Helen Dickinson.

“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,” she added.

Fibre2Fashion News Desk (DS)