A coalition of over 70 retail CEOs is advocating for the creation of a Retail Rates Corrector.
- The proposed correction seeks a 20% reduction in business rates on retail properties.
- This move aims to correct a tax imbalance, as retail contributes disproportionately to business taxes.
- Major retail figures, including leaders from M&S and Asos, have supported this initiative.
- The anticipated benefits include slowing shop closures and fostering investment in communities.
In a concerted effort to alleviate financial burdens on the retail sector, more than 70 CEOs from leading retail companies have signed an open letter addressed to Rachel Reeves, Chancellor of the Exchequer. The letter, organized by the British Retail Consortium (BRC), calls for the introduction of a Retail Rates Corrector. This proposed measure would see a 20% reduction in business rates for retail properties, addressing what many believe to be a significant disparity in taxation.
Currently, the retail industry is responsible for 7.4% of all business taxes, despite its 5% contribution to the GDP. This disproportionate tax burden includes a substantial amount attributed to business rates, which account for one fifth of the £33 billion the sector pays in taxes annually, marking it as one of the highest among business sectors.
The call for reform has garnered support from key figures in the retail industry, including Stuart Machin of M&S, Peter Wood of AllSaints, and José Antonio Calamonte of Asos. Other signatories include Jo Whitfield from Matalan and Helen Connolly from New Look. These leaders highlight the initiative’s potential to keep retail outlets open and stimulate new investments in jobs and community infrastructure.
Helen Dickinson, chief executive of the BRC, emphasized the retail sector’s vital role in generating tax revenues “far beyond the industry’s size.” She called for the government to take action to “rebalance the system,” thereby ensuring a fairer distribution of tax responsibilities across different industries. Dickinson stated that such changes would promote increased investment in “people, places and communities.”
The initiative aligns with the Labour government’s manifesto, which argues for a restructuring of the business rates system to more equitably distribute tax burdens. While the specifics of the new system remain undefined, the government’s goals include leveling the playing field for high street and online businesses and addressing vacant retail properties. Historically, the fashion retail sector has been vocal in advocating for business rates reform, with upcoming changes in April 2025 expected to increase costs by approximately £470 million.
The proposed Retail Rates Corrector aims to balance the taxation burden on retail, promoting economic growth and sustainability.
