Over 70 retail CEOs are urging a reformation of the business rates system.
- An open letter proposes a 20% reduction in business rates for retail properties.
- Retail industry argues for fair representation relative to their economic contributions.
- Signatories highlight the disparity between the retail sector’s tax burden and GDP share.
- The proposal could prevent shop closures and stimulate investment in communities.
More than 70 prominent figures in the retail sector have addressed a letter to the Chancellor of the Exchequer, Rachel Reeves, advocating for the implementation of a ‘Retail Rates Corrector’. This initiative seeks to alleviate the financial strain on retail businesses by proposing a 20% reduction in their business rates. Coordinated by the British Retail Consortium (BRC), this collective plea emphasises the disproportionate tax burden the sector bears, paying £33 billion in total business taxes annually, which corresponds to 7.4% of all business taxes, despite only contributing 5% to the GDP.
This hefty financial obligation, with a significant portion attributed to business rates, positions the retail industry as the highest business rate contributor across sectors. The letter’s signatories include influential retail executives such as M&S’s Stuart Machin, AllSaints’ Peter Wood, and ASOS’s José Antonio Calamonte, among others. Their unified voice underscores the severity of the current tax system’s impact on retail operations.
A pivotal aim of the proposed corrector is to decelerate the pace of retail store closures while invigorating new investments in employment opportunities, retail spaces, and local communities. As Helen Dickinson, Chief Executive of the BRC, articulates, “Retail has been the golden goose, generating tax revenues far beyond the industry’s size, but the current situation is not sustainable.” The demand for reform underscores a broader strategy to rebalance the existing framework, ensuring equitable tax contributions across all industries.
With the Labour government’s manifesto suggesting a replacement of the current business rates system to level the playing field between high street retailers and online platforms, the precise nature of these reforms remains undefined. Nevertheless, the urgency for change resonates strongly within the fashion retail community, which has long championed the cause for business rates restructuring.
As the 2025 increase in business rates multiplier to 54.6p looms, entailing an estimated £470 million impact on the retail sector, the call for an equitable system intensifies. The forthcoming budget presents a critical opportunity for legislative action to foster a conducive environment for retail investment and growth, thereby benefiting consumers, employees, and the broader economy.
The proposed ‘Retail Rates Corrector’ aims to rebalance the tax landscape, alleviate pressures on retailers, and enhance economic investment.
