Leading retailers are warning the Chancellor of a £400m rise in business tax
Warning: Chancellor Jeremy Hunt
Jeremy Hunt has been urged by some of the country’s biggest retailers to avoid a £400 million rise in business rates which they say could jeopardize 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 tariffs to be frozen.
The letter, coordinated by the British Retail Consortium (BRC), said companies had struggled to contain price rises despite costs rising sharply over the last 18 months, cutting into profit margins.
They said the efforts were “starting to bear fruit” as store price inflation fell from a peak of 9 percent in May to 6.9 percent in August.
“An inflationary increase in business rates would add over £400 million to the industry’s cost base next year, significantly undermining this progress,” the letter continued. “It would also have a much larger impact, jeopardizing the profitability of many businesses and impacting the industry’s ability to invest.”
Typically, business rates increase in April, using the inflation rate from September of the previous year. However, they have been frozen for three years since the pandemic.
The BRC letter said an increase next spring would add more than £400 million to retailers’ business rates bills, assuming inflation remains above 6 per cent this month.
A survey of BRC members found that 59 percent said such an increase would mean “significant” upward pressure on prices for customers.