The British Retail Consortium (BRC) has warned that the impact of a hike in business rates in April 2019 in line with the latest consumer price index figures will cost the retail industry nearly £200m.
The BRC is calling on the Chancellor to reform the business rates system in his Autumn Budget statement on 29th October, suggesting that he: freeze the business rates multiplier for two years until the 2021 revaluation, after which three-yearly revaluations will be undertaken; and work with industry to set out principles for future business taxation, outlining a long-term vision, aligning international efforts, and publishing a holistic road map with immediate steps to reduce the burden of commercial property taxation.
Helen Dickinson OBE, chief executive of the BRC, says: “Retailers need the forthcoming Budget to reduce the cost burden on retail businesses. This will incentivise innovation and support the industry in creating quality jobs and providing great choice for consumers at competitive prices – future-proofing retail to ensure the best is made of the opportunities and challenges thrown up by transformation.
“The business taxation system is in urgent need of reform but any shift to an online sales tax would represent a double jeopardy for many retailers who are responding to customer demand and investing in online retailing. Eight out of the top 10 online retailers also have physical stores.
“If the Government is to follow through on its commitment to 'back business' they cannot penalise retailers for investing in our high streets or dis-incentivise them from investing in new technology to meet the challenge of changing shopping habits. We need a fundamental reform of the business taxation system to make it fit for a modern retail industry operating in the 21st century.”
Through the consortium, the retail industry has also suggested introducing a post-Brexit VAT deferment scheme, improving the flexibility of the Apprenticeship Levy, regulating the payments landscape and improve competition, and to ensuring there are no unintended consequences for businesses or consumers from new measures on plastic waste and products.
Read the BRC's full Budget submission here.