Retail titans urge Chancellor to cut business rates by a fifth

Major British retailers including Tesco, Sainsbury’s and Marks & Spencer have urged Rachel Reeves to cut business rates by a fifth.

More than 70 high street business owners have called on the Chancellor to cut retail property taxes amid fears of store closures.

In a letter to Reeves ahead of the October 30 budget, the retail titans said their industry pays “more than its fair share” and has been a “golden goose” for the tax office.

But the Chancellor has said there is a £22bn black hole in the government’s finances, casting doubt on business rates reform in the Budget.

Sainsbury’s chief executive Simon Roberts, Tesco UK chief executive Matthew Barnes and M&S chief executive Stuart Machin are among the signatories. alongside the bosses of H&M, Asda, B&Q, Morrisons, Currys, Primark and WH Smith.

The sector pays 7.4 per cent of all business taxes (equivalent to £33bn) and a fifth of that amount is made up of business rates, they said. The group, which included bosses from Aldi and Asos, has called for a 20 per cent reduction in business rates bills for retail properties around the world.

Business rates are a tax based on the value of a commercial property, meaning stores pay a premium compared to online giants.

The Labor Party has promised reforms, saying the system “disincentivises investment, creates uncertainty and places an undue burden on our high streets”. In its manifesto, the party promised to “replace the business rates system, so we can raise the same revenue but in a fairer way”.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Retail has been the goose that lays the golden egg, but the current situation is not sustainable.”

“The Government should act to rebalance the system.” He warned that more than 1,000 businesses close a year.

UK Hospitality said last month that businesses face a “devastating cliff” in April when the tax break, introduced during the Covid era, ends.

A Treasury spokesperson said: “The Government’s manifesto committed to a fairer business rates system that levels the playing field between high street giants and online giants.”