The British Retail Consortium (BRC) has proposed significant changes to business rates to address inequities facing retail businesses.
- The BRC’s research indicates that retail is disproportionately taxed, shouldering 7.4% of all business taxes yet only representing a fraction of economic activity.
- A suggested ‘20% Retail Rates Corrector’ aims to adjust business rates equitably across retail properties, potentially saving thousands of shops.
- The organisation warns of severe consequences, including the closure of 17,300 shops, if reform is not enacted.
- Drapers’ Reset Fashion Retail campaign highlights urgent issues, echoing the need for government intervention in business rates reform.
The British Retail Consortium (BRC) has put forward a proposal urging the government to institute a 20% corrective measure on business rates for all retail properties. This initiative is timed strategically ahead of the upcoming Budget on 30 October, aiming to introduce fairness into a system where the retail industry feels overburdened by taxation.
In supporting its proposal, the BRC released research demonstrating the disproportionate tax burden borne by the retail sector. Despite making up a small percentage of the overall economy, retail accounts for 7.4% of all business taxes, equating to £33 billion—or 55% of the sector’s pre-tax profits. This disparity underscores the financial strain on brick-and-mortar retailers compared with other economic sectors.
The proposal, termed the ‘20% Retail Rates Corrector,’ is designed to align the tax obligations of physical retail stores with their actual economic footprint. By addressing these imbalances, the BRC hopes to prevent the projected closure of approximately 17,300 retail outlets over the next decade—a scenario that could devastate high streets across the country.
Reflecting broader concerns, Drapers’ Reset Fashion Retail campaign has been vocal about the necessity for government action. The campaign focuses on three pivotal issues: business rates, retail rents and leases, and local regeneration. It argues that without policy shifts, the retail sector’s recovery and growth are at significant risk, advocating for urgent interventions from both central and local governments.
As policymakers contemplate these recommendations, the urgency conveyed by the BRC and supported by industry campaigns like Drapers’ highlights a critical juncture for the retail industry—one where strategic adjustments could dictate the future viability of countless businesses.
The proposed corrective adjustments could significantly shape the future of retail by ensuring a fairer tax landscape.
