Tue, 13th Aug 2019
Numerous retailers, ranging from Iceland to Harrods, have come together to petition the government for tax cuts. More than 50 retailers have put their names to a letter to Chancellor Sajid Javid.
The bosses of some of the UK’s biggest retailers wrote a letter saying that there is a need for urgent reform of the business rates system. The UK economy is on the brink of recession and there is a growing likelihood of a no-deal Brexit. Retailers warn that they are facing increasing strain and that they need support from the government to avert a crisis.
The chief executives and bosses of companies including Boots, Asda, John Lewis, Marks & Spencer, Harrods, Sainsbury’s, Iceland and Greggs have all petitioned to see the business rates system changed, noting that it is an outdated system which is detrimental to both jobs and communities. The retail sector is the largest private sector employer in the country, accounting for around 5% of the UK economy and around 3 million jobs, yet it pays around 25% of business rates and 10% of all business taxes.
Retailers are faced with challenges in terms of competition from online-only companies and also falling footfall. Online giant Amazon pays just £63.4 million in business rates, which is around £40 million less than the bill faced by Next, even though Amazon enjoys more than double the sales of Next. It is challenges such as this which are why vacancy rates on the high street have reached a four-year high.