A coalition of retailers is pressing Chancellor Rachel Reeves to act on business rates reform, highlighting a looming financial burden for small businesses. Insights from Altus Group suggest a potential £2.7bn tax hike will hit retail, leisure, and hospitality sectors hard. Proposals include extending the vital relief scheme and fair adjustments to prevent industry imbalance.
- Over 252,000 small business entities face increased financial pressure from ending relief.
- Chancellor urged by industry leaders to consider vital sector support in budget.
- Calls for a ‘Retail Rates Corrector’ to equitably adjust retail property taxes.
- Retail, leisure, hospitality account for significant portion of proposed tax uptick.
A significant coalition of retail leaders has united to urge Chancellor Rachel Reeves to honor her commitment to reform business rates. This movement underscores the critical financial pressures looming over smaller retail, leisure, and hospitality businesses. Recent analysis by Altus Group has revealed the potential for a staggering £2.7 billion tax increase, primarily affecting these vulnerable sectors.
From next April, more than 252,000 shops, cafes, pubs, restaurants, and entertainment venues such as bowling alleys will experience a substantial rise in property taxes. The impending cessation of the 75% relief scheme, which will be capped at £110,000, threatens to increase the fiscal burden on these establishments.
Industry voices, such as Andrew Goodacre, CEO of the Bira trade body, emphasize the necessity for the Chancellor to extend retail, hospitality, and leisure relief as an essential measure to revitalize and support high street growth. Goodacre stated 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.’
Further stressing the urgency of the matter, Altus Group’s president, Alex Probyn, highlighted the challenge facing Chancellor Reeves. Probyn noted the ‘£22bn black hole’ in the nation’s public finances, cautioning against a ‘cliff edge’ scenario for these industries unless appropriate interventions are made at the upcoming budget announcement. Actively participating in the dialogue, over 70 retail executives, including leaders from M&S, Primark, and Ikea, have penned an open letter organized by the British Retail Consortium. They advocate for a ‘Retail Rates Corrector,’ suggesting a 20% downward adjustment on business rates for retail properties to address the disproportionate tax obligations, as the retail industry accounts for 7.4%, approximately £33 billion, of all business taxes.
The British Retail Consortium underscored the urgency by presenting that one-fifth of the burgeoning £33 billion tax charge comprises business rates, an element they assert necessitates immediate review and rectification.
Retail leaders emphasize the crucial need for business rate reforms to sustain the economic viability of small businesses in the sector.
