Chancellor Rachel Reeves’ upcoming budget is a pivotal moment for UK retailers.
- CEOs express concerns about the impact of current tax burdens on the sector.
- Business rates reform is a central focus for revitalising high streets.
- Retail leaders stress the importance of balancing online and offline tax structures.
- Interest rate clarity is also highlighted as crucial for household spending.
As Chancellor Rachel Reeves prepares to unveil her first budget, leading figures in the UK’s retail sector are keenly observing potential outcomes. Retail executives are particularly anxious about the current tax regime, expressing concerns about its detrimental impact on the industry. A predominant issue is the pressing need for reform of the business rates system, which many consider outdated and unjust.
M&S’s significant contributions to the UK Treasury highlight the complexity of the current tax framework. Despite supporting government efforts to enhance employment standards, their executives are troubled by plans to increase National Insurance alongside existing taxes like business rates. M&S stresses the importance of not diluting Labour’s promises, particularly regarding business rate overhauls and flexibility in apprenticeship levy funds.
Retailers are also focusing on the adaptability required in the face of fluctuating business rates. Leaders at Kankiwala and other companies acknowledge the inevitability of change, emphasising their readiness to innovate and ensure optimal consumer offerings regardless of budget decisions. Though changes in business rates are anticipated, the sector remains determined to adapt accordingly.
One company reported a dramatic £20m increase in business rates over two years, highlighting the financial strain on brick-and-mortar establishments. They argue that protecting physical stores and ensuring fair online taxation is critical. With over 800 million annual transactions, their commitment to retaining high street presence remains firm, provided costs remain viable.
Interest rates also feature prominently in retailer concerns. The sector seeks clarity and certainty, as these factors significantly influence consumer spending. David Epstein of Frasers Group calls for transparent policy-making around business rates and a level playing field to foster fair competition.
The overarching demand from the retail industry is for the government to honour its pledge to review business rates comprehensively, addressing perceived inequities between physical and digital retail platforms. Reports of 7,000 shop closures this year underscore the urgent need for action, as the industry seeks reforms that can bolster its substantial contribution to the economy and support over 5.7 million jobs.
Retailers are united in the call for meaningful reform to business rates and fair treatment across the industry.
