John Lewis Partnership chair Jason Tarry is the latest in a slew of retail leaders to warn that increasing taxes on large retailers could lead to further high street closures.
Tarry criticised proposals for a so-called ‘warehouse tax’, arguing that higher property taxes on large retail premises would hit department stores and supermarkets rather than online-only operators.
Writing in The Telegraph, he warned that the plans showed a “fundamental misunderstanding of how modern high streets work”.
The John Lewis boss said larger retailers played a crucial role in supporting surrounding independent businesses, with department stores and supermarkets bringing customers into town centres.
He argued that raising taxes on these businesses could have a knock-on effect on smaller shops, cafés and restaurants that rely on the footfall they generate.
The warning comes ahead of Chancellor John Healey’s Budget on 28 October, amid calls for the government to ease the business rates burden on high street businesses.
Tarry revealed that the John Lewis Partnership pays around £170m a year in business rates, making it the retailer’s biggest tax expense and its second-largest cost after wages.
He said changes to the business rates system had already left more than 200 John Lewis and Waitrose stores facing higher charges, compared with just 18 of the partnership’s distribution centres.
Around 80 per cent of the additional burden falls on its shops, despite the measures being intended to address the tax imbalance between online and physical retail.
Tarry said that while online businesses should pay their fair share, further increases in property taxes would risk making stores less financially viable.
He called on the government to ensure that no high street shop faces higher taxes under any future changes to the business rates system.
The retailer is investing £50m in its John Lewis stores this year, alongside plans to open three new Waitrose branches and refurbish a further 28.
Tarry said businesses needed a more predictable tax environment to continue investing in their stores and local communities.
However, since his intervention, the Treasury is understood to have ruled out further tax increases on warehouses at the upcoming Budget, according to Sky News.
It follows warnings from Marks & Spencer, whose chief executive Stuart Machin has also called for changes to business rates, arguing that retailers already shoulder a disproportionate share of the tax burden.
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