Lawsuit: Retailers have called on the Chancellor to take action on business rates
A number of major retailers have called on the Chancellor to take action on business rates to revive the High Street.
With less than two weeks to go until the Autumn Statement, bosses at household names including Marks & Spencer, Sainsbury’s and Currys have urged Jeremy Hunt to cut or freeze the metrics used to calculate property tax bills.
Business rates are expected to rise by 6.7 per cent next year.
This translates into a £470 million increase for British retailers, according to lobby group British Retail Consortium.
There have been warnings that a sharp tax increase could force retailers to raise their prices, thwarting the government’s mission to reduce inflation.
Retailers have also raised concerns about what a greater tax burden could mean for high streets across the country, amid high rates of empty stores and a scourge of theft.
Stuart Machin, chief executive of M&S, called high rates a “blocker to the regeneration of our towns and cities”.
Warning that further increases “threaten to divert millions of pounds from ongoing investment to keep prices low and create jobs across the country”, he added: “The retail sector is being disproportionately affected by business rates at a time when that the Government is trying to address Inflation and consumers are still struggling with the cost of living.
Echoing this sentiment, Sainsbury’s boss Simon Roberts said the supermarket spends almost £500m a year on business rates, its biggest tax bill.
“If there is one issue that worries me that could disrupt the decline in food inflation, it is the decisions made in the Budget on business rates,” he told The Mail.
“There is clearly a risk that any increase will put further pressure on food prices.”
The so-called business rate multiplier was frozen this year to give companies a break. But if no action is taken, it will increase in April next year.
Alex Baldock, chief executive of Currys, said the retail sector was “overstretched” and that an increase in tariffs would allow Amazon “a free ride while British retailers bear the burden and while our town centers continue to empty”. Pubs and restaurants have also urged the Chancellor to cancel a planned rise in business rates, warning of a possible series of closures.
Television chef Tom Kerridge said the “stark reality” was that hospitality businesses had been hit by rising costs and many would be forced to close without further government support.
More than 200 hospitality bosses signed a letter to Hunt, including Burger King, Fuller’s, Greene King and Mitchells & Butlers.
A Treasury spokesman said: ‘Inflation is falling and our priority is to halve it. We continue to support our businesses, which is why we have completely removed a third of properties from paying business rates, spent billions cutting retail, hospitality and leisure bills by 75 per cent and effectively reduced the corporation tax by £27 billion by cutting spending overall. ‘