Retailers warn Chancellor towards £400m enterprise charges hike
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osses of a raft of Britain’s largest retailers, resembling Tesco, M&S and B&Q, have urged the Chancellor to freeze their property taxes to keep away from a roughly £400 million hike.
A bunch of 44 retail leaders have written to Jeremy Hunt to halt an inflation-based improve to enterprise charges payments, the property tax which impacts the UK’s excessive avenue companies.
The letter, which has been co-ordinated by the British Retail Consortium, mentioned an increase could be “threatening the viability of many shops and hindering the industry’s capacity to invest”.
Bosses resembling Tesco UK and Ireland chief government officer Jason Tarry, Sainsbury’s chief government Simon Roberts and Greggs chief government Roisin Currie backed the calls.
Currently, enterprise charges are deliberate to extend in April 2024 according to the inflation determine for September. This determine is because of be introduced in October and is presently forecast at about 6%.
With store worth inflation having eased for 3 consecutive months, it’s critical that the Government doesn’t add to the fee burden and undermine this progress
The BRC mentioned this is able to quantity to a rise of greater than £400m a 12 months to retailers’ enterprise charges payments.
It highlighted that a rise at that stage would additionally put extra stress on pricing in shops, because the Chancellor and Prime Minister search to satisfy their pledge of halving inflation this 12 months.
In the letter they added: “Global supply chain issues are already likely to increase costs in the months ahead, including Russia’s withdrawal from the Black Sea Grain Initiative and targeting of Ukrainian grain silos, plus restrictions on Indian rice exports and ongoing labour market challenges.
“Against this backdrop, the Government should not make the situation worse by adding significantly to our cost base – freezing the business rates multiplier at its current level would avoid this.”
An inflation-linked rise to enterprise charges would have been because of happen in April this 12 months however was frozen by the Government.
Helen Dickinson, chief government of the BRC, mentioned: “The Chancellor must freeze rates to help keep a lid on retailers’ already-high costs.
“With shop price inflation having eased for three consecutive months, it is vital that the Government does not add to the cost burden and undermine this progress.
“A £400 million rates rise will also cost jobs, harm the economy and damage the vibrancy of our town and city centres.
“While other business taxes, such as corporation tax and VAT, rise and fall with the movements in the economy, business rates must be paid in full whether firms are making a profit or a loss.
“This makes business rates the difference between retailers being forced to close existing stores rather than opening new ones.”