The British Retail Consortium (BRC) has united 44 retail leaders, representing more than a third of the industry, to appeal to Chancellor Jeremy Hunt for the cancellation of a planned £400 million increase in business rates. These retail leaders are concerned that this increase could lead to higher prices for consumers and job losses. The retail sector already pays over £7 billion in business rates annually, and without intervention, the business rates multiplier is set to rise in April 2024, potentially adding an additional £400 million to retailers’ bills each year.
The call for the cancellation of the planned increase in business rates comes at a time when shop price inflation is starting to ease. The BRC conducted a survey among its members, which revealed that 68% of respondents expressed concerns about the rates increase, with 69% indicating that it would have an impact on customer prices. Additionally, all respondents stated that it would affect their investment plans.
The letter sent to Chancellor Jeremy Hunt highlighted that retailers have already faced significant cost inflation over the past 18 months, resulting in contracted profit margins. The BRC’s data also showed a decrease in shop price inflation from a peak of 9.0% in May to 6.9% in August.
Helen Dickinson, Chief Executive of the BRC, argued that the planned rates rise would hinder the economy and adversely affect the vitality of town and city centers. Business rates are different from other business taxes, as they must be paid regardless of profit or loss. This puts retailers in a difficult position, as they may have to consider closing stores instead of opening new ones to cope with the financial burden.
In conclusion, prominent retail leaders in the UK are urging the government to cancel a proposed £400 million increase in business rates. They are concerned that this increase could result in higher prices for consumers and potential job losses. The retail sector already pays a significant amount in business rates, and the planned rise in the business rates multiplier could further impact retailers’ bills. This call for intervention comes at a time when shop price inflation is starting to ease. The BRC’s survey results show that retailers are worried about the rates increase and its potential impact on customer prices and investment plans. The letter emphasizes that retailers have already faced cost increases, leading to reduced profit margins. The Chief Executive of the BRC highlights that business rates, unlike other taxes, must be paid regardless of profitability, potentially forcing retailers to close stores.
