Over 70 leading retail CEOs, including several furniture sector figureheads, have written to the Chancellor, Rachel Reeves MP, stating that “now is the time to level the playing field between industries”.
In an open letter co-ordinated by the British Retail Consortium (BRC), CEOs have called on Government to introduce a Retail Rates Corrector as part of their commitment to reforming the business rates system.
The Retail Rates Corrector – a -20% downward adjustment in business rates paid on retail properties – aims to redress the imbalance that sees the retail industry pay 7.4% of all business taxes (£33b), a share 1.5 x greater than its share of the overall economy (5% GDP). This tax burden holds back investment in people and places, says the BRC, directly affecting the 3 million people employed by the industry, and the 2.7 million additional people employed within the supply chain.
“It also matters for the tens of millions of shoppers all over the country and the communities they live in,” the consortium continues. “The UK has been losing shops at a rate of over 1000 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.
“What is clear is that our high streets and town centres are paying far more than their fair share of tax. Retail and hospitality pay the highest proportions of their pre-tax profits in taxes compared to any of the other main business sectors. Of retail’s £33b total tax bill, one fifth is made up of business rates – the highest of all business sectors.
“This is why 71 CEOs, covering groceries, fashion, furniture, electronics and more, have come together to write to the Chancellor.”
The signatories include Sue Kemp (AIS), James Barker (Barker and Stonehouse), Nick Collard (Bensons for Beds), Jonathan Hirst (Dreams), Ed Duggan (Fishpools), Charlie Harrison (Furniture Village), Damian McGloughlin (Homebase), Peter Jelkeby (IKEA UK and Ireland), Stuart Machin (M&S), Simon Roberts (Sainsbury’s), John Pattison (Sterling Furniture Group), Tobin James (Tempur UK) and Matthew Barnes (Tesco).
Helen Dickinson, chief executive of the BRC, says: “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.”
Read the letter here.