Retailers are urging Chancellor Rachel Reeves to honour her pledge to reduce business rates, amidst fears of a significant tax increase.
- Analysis by Altus Group suggests a £2.7bn potential tax hike, impacting small retail, leisure, and hospitality businesses.
- The conclusion of a 75% relief scheme in April threatens over 252,000 establishments with increased property taxes.
- Retail leaders, including those from major UK brands, have written to Reeves demanding a ‘Retail Rates Corrector’.
- Experts argue that immediate action is essential to avoid detrimental effects on the retail sector and to uphold Labour’s manifesto.
The retail sector is currently rallying for support from Chancellor Rachel Reeves to alleviate the impending pressure of business rates. This call for action comes in response to a revealing analysis conducted by real-estate firm Altus Group, which highlights a looming £2.7 billion tax increase. The significant financial burden is expected to predominantly affect small businesses within the retail, leisure, and hospitality industries. With the termination of the current relief scheme scheduled for April next year, over 252,000 establishments face the prospect of higher property taxes.
The analysis further delineates that the collective financial contribution of all sectors will result in an overall £545 million tax increase. Notably, the retail, leisure, and hospitality industries are anticipated to absorb £250 million of this additional expense. This worrying scenario has prompted industry leaders to vocalise the necessity for immediate government intervention.
Bira trade body CEO Andrew Goodacre has emphasised the vital nature of extending the retail, hospitality, and leisure relief, describing it as a crucial element for the revitalisation and growth of high streets. Altus Group’s president, Alex Probyn, concurs, suggesting that the Chancellor, despite a significant national fiscal deficit, must act to avert a ‘cliff edge’ for these sectors in the upcoming budget address, while faithfully delivering on Labour’s promises.
Over 70 retail executives, representing prominent UK retailers such as M&S, Primark, and Tesco, have officially communicated their concerns through a letter to Reeves. Orchestrated by the British Retail Consortium, the letter advocates for an equitable adjustment across industries by proposing a ‘Retail Rates Corrector.’ This concept entails a 20% reduction in business rates specifically for retail properties, aiming to rectify the imbalance that pressures the industry to contribute 7.4% of the nation’s total business taxes. Within the £33 billion tax obligation faced by retailers, one-fifth is comprised of business rates.
It is imperative for the government to address these concerns promptly to sustain the viability of key sectors and align with legislative commitments.
