Leading retailers warn Chancellor of £400m business tax hike
Warning: Chancellor Jeremy Hunt
Jeremy Hunt has been urged by some of the country’s biggest retailers to avoid a £400m corporate rate hike, which they say threatens to undermine the fight against inflation.
Bosses from Marks & Spencer, Greggs, Harvey Nichols, Tesco, Sainsbury’s and B&Q are among 44 who have signed a letter calling for a tariff freeze.
The letter, coordinated by the British Retail Consortium (BRC), said companies have been fighting to keep price rises in check despite costs soaring over the past 18 months, eroding profit margins.
They said the efforts were “beginning to pay off”, with retail price inflation falling from a peak of 9 percent in May to 6.9 percent in August.
“An inflationary rise in business rates would add over £400 million to the sector’s cost base next year, seriously undermining this progress,” the letter added. ‘It would also have a much wider impact, threatening the viability of many stores and hampering the industry’s ability to invest.’
Business rates normally go up in April, based on inflation last September. However, they have been frozen for three years since the pandemic.
The BRC letter said that, based on inflation remaining above 6 percent this month, an increase next spring would add more than £400 million to retailers’ business rates.
A survey of BRC members found that 59 percent of such an increase would put ‘significant’ upward pressure on prices for customers.