Retailers are pressing Chancellor Rachel Reeves to honour her promise of relieving business rates.
- A potential £2.7bn tax increase may hit smaller retail, leisure, and hospitality firms.
- From April, 252,000 businesses could face a sharp rise in property tax as a relief scheme ends.
- Retail sector bosses urge for rates reform to balance the financial burden across industries.
- An open letter suggests a 20% reduction in business rates on retail properties.
Retailers across the United Kingdom are urging Chancellor Rachel Reeves to deliver on her commitment to alleviate the burden of business rates. This call for action gains urgency as new findings highlight a looming £2.7 billion tax increment that is anticipated to predominantly affect smaller businesses within the retail, leisure, and hospitality sectors.
The potential tax increase arises as a 75% relief scheme, previously set with a cap of £110,000, is expected to conclude in April next year. Consequently, over 252,000 shops, cafes, pubs, and other venues such as bowling alleys are projected to encounter a substantive increase in property tax liabilities.
Alex Probyn, president of property tax at Altus Group, emphasised the critical need for government intervention. He remarked, “Despite the £22 billion ‘black hole’ in the nation’s public finances, the Chancellor must now prevent a cliff edge for the retail, hospitality and leisure sectors at her upcoming budget whilst also delivering upon Labour’s manifesto.”
The British Retail Consortium coordinated an open letter, endorsed by more than 70 retail executives from major companies including M&S, Primark, Poundland, Ikea, and Tesco. This letter, addressed to Reeves, advocates for reforming the current business rates system prior to the Autumn Statement scheduled later this month. It suggests introducing a mechanism termed the Retail Rates Corrector, recommending a 20% downward revision in the business rates applied to retail properties.
This letter argues for a more balanced approach, pointing out an unjust disparity where the retail sector contributes approximately 7.4%, roughly £33 billion, of the total business taxes, with one fifth of this amount constituted by business rates.
Chancellor Reeves faces growing pressure from retail leaders to ensure equitable taxation through business rates reform.
