More than 70 retail industry leaders have written to the Chancellor of the Exchequer, calling for a reduction in business rates.
In a joint letter organised by the British Retail Consortium (BRC), CEOs from major retail sectors including groceries, fashion, and electronics are pressing for the introduction of a “Retail Rates Corrector” to address what they describe as an unfair tax burden on the industry.
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A call for fairness in taxation
The retail sector contributes 7.4% of all business taxes in the UK, despite making up only 5% of the economy. This tax imbalance, highlighted in the letter, has been a major factor in recent store closures.
The proposed Retail Rates Corrector would reduce business rates on retail properties by 20%, providing relief to an industry struggling with high taxation. CEOs argue that such a measure would enable retailers to reinvest in their businesses, benefiting local communities, jobs, and high streets across the UK.
Research suggests that over the last five years, business rates have contributed to the closure of 6,000 stores. Without changes to the current system, an additional 17,000 shops could shut over the next decade, leaving communities without vital retail services.
Business rates stifling investment
The retail industry employs over 3 million people directly and supports a further 2.7 million jobs in its supply chain.
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By GlobalDataDespite its importance to the UK economy, retail businesses face an outsized tax burden, with one fifth of their £33bn tax bill coming from business rates alone.
This makes retail one of the highest taxed sectors, alongside hospitality. Retail leaders argue that these taxes are preventing investment in key areas, including wages, training, and technology.
In their letter, they call on the government to use the upcoming Autumn Budget as an opportunity to address the issue by reducing the tax load on retail properties, levelling the playing field with other industries.
High streets in decline
The decline of the UK’s high streets has been widely documented, with the loss of over 1,000 shops per year. The CEOs believe that reducing business rates would halt this trend, allowing stores to remain open and encouraging further investment in communities.
They assert that the Retail Rates Corrector would support not only businesses but also consumers, helping to preserve jobs and maintain thriving high streets.
The letter comes as the government prepares for the Autumn Budget, with many in the retail sector hoping for substantial reforms to the business rates system.
According to Helen Dickinson, Chief Executive of the British Retail Consortium, the current tax system is unsustainable and risks undermining the retail industry’s ability to support the UK economy.
