Overtaxed retail sector presents ‘golden opportunity’ to deliver government policies

New research by the British Retail Consortium (BRC) has found that the UK’s retail sector has been “overtaxed” compared to others, presenting a potential opportunity for the government to fix such discrepancies and help deliver on policies.

This is according to BRC chief executive Helen Dickinson, who said that this latest research proved “what retailers have known for years: the industry is paying far more than its fair share of tax”.

The organisation said that retail was paying 7.4 percent of all business taxes, amounting to 33 billion pounds, a share 1.5 times greater than its share of the overall economy (5 percent GDP).

This equated to 55 percent of the industry’s pre-tax profits, the highest proportion, along with hospitality, of all main business sectors. Additionally, of this total tax bill, 11 percent of profits is made up of business rates, the highest of all business sectors, the BRC said.

The council emphasised the urgency of aiding the retail sector in light of the increased level of business closures over the last five years, during which 6,000 shops have closed in the UK.

It further noted that in the Labour government’s manifesto it was stated that the “current business rates system disincentivises investment, creates uncertainty and places an undue burden on our high streets”.

As such, in its latest Budget submission, the BRC called on the introduction of a 20 percent Retail Rates Corrector, which it said would meet this manifesto commitment and restore the UK’s high streets.

Dickinson called the corrector a “decisive move that levels the playing field between different sectors of the economy” and would allow retailers to move further with investments that “play a critical part in driving growth”.