Retail giants team up to demand business rates cut

Retail giants urge government to cut business rates
The Retail Jobs Alliance back an online sales tax to fund a cut to business rates.
// Retailers including Tesco, Sainsbury’s, The Co-op and Kingfisher have teamed up to urge the government to cut business rates
// The Retail Jobs Alliance, which is formed of businesses that employ more than a million people, back an online sales tax to fund the business rates cut

Retail giants including Tesco, Sainsbury’s, Morrisons and Kingfisher have formed a new coalition, the Retail Jobs Alliance, to petition the government for a permanent business rates cut funded by the introduction of a new online tax.

The Retail Jobs Alliance has written to the chancellor to urge that he “cuts the shops tax”.

The alliance said it would be “making the case for an overall cut in business rates for all retail premises, and we are open to funding this through the introduction of a new online sales tax”, according to Sky News.

This is the latest push by the retail sector to reform business rates, which observers believe are outdated as it puts the tax burden on retailers with stores despite the increasing consumer shift to online. Many retailers believe a business tax cut would level the playing field between online and store-based retailers.

Earlier this year the Treasury launched a consultation on an online sales tax, which a survey showed last month was backed by an overwhelming majority of retailers.

The Retail Jobs Alliance insists that a cut in business rates would help retailers to keep prices down for customers as the cost of living soars.

READ MORE: Retailers demand cut to business rates to avoid “bankruptcies”

In their letter to Rishi Sunak, the retail leaders said: “We are all, like you, acutely concerned with pressures on household budgets and the rising cost of living, and we all have a role to play in keeping costs down as far as we can.

“Business rates – the Shops Tax – are a significant part of retailers’ overheads.

“A meaningful cut in the Shops Tax would make a big difference to retailers’ ability to invest more in the shops and stores that we know customers value, as well as to create jobs.

“This would make it easier for everyone in the retail sector to mitigate inflationary pressures, keep existing shops open and open new ones.”

The Retail Jobs Alliance is formed of businesses that employ more than one million people – a third of the retail sector’s workforce.  Signatories of the letter to the Chancellor include Tesco chief executive Ken Murphy, Sainsbury’s boss Simon Roberts, Kingfisher chief executive Thierry Garnier, and The Co-op Group interim boss Shirine Khoury-Haq.

The Retail Jobs Alliance pointed out that several of its members “are businesses with significant online operations as well as physical shops, so would expect to pay any new online sales tax as well as benefiting from a business rates cut”.

“But we agree that cutting the Shops Tax must be a policy priority, and that an online sales tax would be acceptable as part of a package of retail tax reform that rebalances the system so that it better reflects how retail works now and helps protect the shops which so many people want to see in their communities.”

The Retail Jobs Alliance urged the Chancellor to include all retailers, not just small ones, in any cut to business rates.

It said that this could “signficantly boost the social fabric of our villages, towns and cities”.

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