UK retail sector to be hit hard by Autumn Budget: BRC

“As the industry prepares for over £2.5 billion in new costs in 2025, improvements to the business rates system will not come until 2026. We welcome the recognition that retail, along with hospitality businesses, should pay lower rates,” said BRC chief executive Helen Dickinson in a release.

“But with the detail still to be worked through, it is unclear whether this will address an imbalance which sees retail, as 5 per cent of the economy, pay 21 per cent of the total business rates bill. In order to stimulate investment, it is vital these changes reduce the overall costs on the industry, rather than simply shifting the burden from one part to another,” she said.

Many questions about the new charges and discounts that will be levied from 2026 remain unanswered. Charging more to businesses with higher rateable values may punish not only distribution hubs, but also larger stores, which play a key role in attracting footfall to high streets and town centres, BRC noted.

“With retailers paying over 21 per cent of all business rates in the economy, the solution is not to simply shift the burden around the industry, but to look outside retail. Without action to address the disproportionate impact of business rates on retail, the government’s plan is simply robbing Peter to pay Paul,” Dickinson said.

“Increases to National Insurance contributions are yet another case of piling taxes on an already overburdened industry—a decision which will reduce investment in shops and jobs. As a low-margin industry and the UK’s largest private sector employer, the scale of increases will have an immediate and disproportionate effect on both retailers and their supply chains, who together are responsible for employing 5.7 million people across the country,” BRC noted.

“….With retailers facing increases in costs from implementation of the Employment Rights Bill and National Insurance contributions, investment plans and economic growth will be impacted given the larger-than-expected increase to NLW [national living wage]. This adds £367 million more than pre-Budget expectations,” Dickinson added.

Fibre2Fashion News Desk (DS)