The British Retail Consortium (BRC) has released new research indicating that the UK retail industry is disproportionately taxed compared to other sectors.
The study, part of the BRC’s budget submission, reveals that retail contributes 7.4% of all business taxes, amounting to £33bn – 1.5 times higher than its share of the economy.
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Retail’s tax contribution represents 55% of the industry’s pre-tax profits, a figure matched only by the hospitality sector and the highest of all main business sectors.
Business rates alone constitute 11% of retail profits, surpassing all other sectors.
BRC warns that the high tax burden is contributing to the decline of high streets, with 6,000 shops closing since 2019, many due to business rates.
Without a proper solution, the trade association expects up to 17,300 closures by 2034.
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By GlobalDataBritish Retail Consortium chief executive Helen Dickinson said: “Our research conclusively proves what retailers have known for years: the industry is paying far more than its fair share of tax.
“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 an economic cost. The rates bill also means missed opportunities as other investments, which would drive growth in the longer term, don’t happen.”
The BRC’s submission to the Autumn Budget includes a call for the government to implement a 20% retail rates corrector, which would adjust bills for all retail properties.
Dickinson added: “The Chancellor has a golden opportunity to fix this and use the scale of the industry to help deliver some of the government’s priorities. 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 to fairer tax 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.”
