Fix broken tariff system, retailers warn Labour

Leading retailers have warned Labour they must deliver on their manifesto promises to reform the broken property tax system.

Business taxes are a local levy paid based on the value of a commercial property. This means that stores pay a premium compared to online giants like Amazon.

Currys chief executive Alex Baldock urged new finance minister Rachel Reeves to put replacing the retail property tax system at the top of her to-do list.

Retail supports 3 million jobs and he believes it can “play a key role” in helping Prime Minister Keir Starmer “drive growth, jobs and prosperity for all”. He added: “Above all, we urgently need to fix the broken, damaging and unfair burden of corporate taxation.”

There will also be pressure on Labour to heed calls to scrap the hated tourist tax and reintroduce a valuable VAT-free shopping scheme for overseas visitors.

Companies including Louboutin (founded by Christian Louboutin), Mulberry, Marks & Spencer, Kurt Geiger and Selfridges have said the lack of tax-free shopping is putting tourists off shopping in British stores. Labour’s manifesto promises to ‘replace the corporate tax system so we can generate the same revenue but in a fairer way’.

It says the system ‘discourages investment, creates uncertainty and places an unnecessary burden on our high streets’.

Retailers are eager for details of Labour’s reforms and want swift action after years of pushing ministers to make changes.

This week, Sainsbury’s also pushed for reform, saying it was “essential to grow our economy”. Businesses will pay 54.6p for every pound of the rateable value of their property after it rose in April. Retailers were furious because the increase was based on the outdated inflation rate of 6.7 percent from September 2023.

High Street bosses have also called for changes to apprenticeship funding to make the rules more flexible and reduce planning delays. Rachel Reeves has insisted she wants to be the most “pro-growth chancellor” in British history.