More than 70 retail chief executives have written to chancellor Rachel Reeves urging the government to implement a Retail Rates Corrector to reduce the sector’s tax burden and unlock growth.
In an open letter organised by the British Retail Consortium, they said: “Now is the time to level the playing field between industries.”
Through business rates and other taxes, the retail industry pays some 7.4% of all business taxes, amounting to some £33bn. The BRC said this figure is more than 1.5% greater than the sector’s share of the overall economy. It wants to see a 20% cut in business rates to rebalance this and alleviate the sector’s tax burden.
“This tax burden holds back investment in people and places – directly affecting the 3m people employed by the industry, and the 2.7m additional people employed within the supply chain,” said the BRC. “It also matters for the tens of millions of shoppers all over the country and the communities they live in.
“The UK has been losing shops at a rate of over 1,000 a year, and research suggests that without action a further 17,000 shops could close over the next decade. The Retail Rates Corrector aims not only to stem this tide of shop closures, but to unlock new investment in jobs, shops and communities.”
In the letter, the 71 chief executives said: “We believe now is the time to level the playing field between industries with a retail adjustment to rates as this is the best way to achieve this manifesto commitment. We are writing to ask you to use the autumn Budget to apply a Retail Rates Corrector, a 20% reduction to rates bills for retail properties of all sizes in all locations.”
Helen Dickinson, chief executive of the BRC, said: “Retail has been the golden goose, generating tax revenues far beyond the industry’s size, but the current situation is not sustainable. The government should act to rebalance the system and ensure all industries are paying their fair share. This in turn would drive increased retail investment in people, places and communities. The Budget is the perfect opportunity to lay the groundwork for local investment that delivers for retail’s customers, delivers for its employees, and delivers for the economy.”
Florian Wupperfeld, chief executive at LCD Ventures, an urban development company, said: “More details on the chancellor’s commitment to reforming the UK’s outdated business rates model is urgently needed, but it will be far from a silver bullet to solving the high street crisis and boosting growth. Without fitting into a holistic approach that considers the diverse needs of Britain’s high streets, the planned overhaul is destined to fail. A tailored strategy that prioritises local, small SMEs first, rather than big conglomerates, will allow us to gauge real impact before any broader implementation.”
He added: “Councils must embrace data-driven placemaking to track the real-time effects of their policies. If we don’t act decisively and comprehensively, we will continue down a dead-end road – wasting billions in uncollected tax revenue while losing the irreplaceable character and community value that our high streets provide across Britain.”
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