Retailers across the UK are calling upon Chancellor Rachel Reeves to honour her pledge in reducing business rates, amidst concerns of an impending tax increase.
- A potential £2.7 billion tax rise could predominantly affect smaller businesses in the retail, hospitality, and leisure sectors.
- The upcoming end of a significant relief scheme threatens over 252,000 establishments.
- Retail leaders have actively sought reform, highlighting the disparity in business rate burdens across industries.
- The British Retail Consortium proposes a Retail Rates Corrector to balance the tax contributions of the retail sector.
Retailers throughout the United Kingdom are urging Chancellor Rachel Reeves to adhere to her commitment to reduce business rates, as financial pressure mounts on the sector to avoid an imminent tax increase. Concerns have emerged following an analysis showing a potential £2.7 billion rise in taxes, which could significantly impact smaller retailers, leisure, and hospitality businesses.
A substantial relief programme is set to conclude in April next year, risking a major uptick in property taxes for approximately 252,000 shops, cafes, pubs, restaurants, and venues, such as bowling alleys. The scheme had been capping relief at £110,000, thereby averting heightened financial burdens for these entities.
According to real-estate firm Altus Group, the retail, leisure, and hospitality sectors will collectively face £250 million in additional tax, contributing to an overall £545 million increase spanning all industries. This development presents a significant challenge for these sectors, already grappling with economic recovery.
Bira trade body Chief Executive Andrew Goodacre remarked to The Guardian, “The Chancellor has the power to extend the retail, hospitality and leisure relief, which is absolutely vital if high streets are to be revitalised and grow.” His statement underscores the crucial nature of government intervention to support these industries.
Last week, over 70 retail executives, including leaders from major companies, rallied together, addressing an open letter to Reeves. This letter, coordinated by the British Retail Consortium, demands reforms to the existing business rates framework and proposes the introduction of a Retail Rates Corrector. This suggested measure aims for a 20% downward adjustment in rates paid on retail properties to address the existing imbalance, where the retail sector contributes 7.4%, or roughly £33 billion, of the total business taxes.
Retailers continue to press for immediate and equitable business rate reforms to prevent undue financial strain on vital economic sectors.
