New retail alliance urges Sunak for permanent business rates cut

Major supermarkets in the UK have formed a new coalition to petition the government for a permanent business rates cut funded by the introduction of a new online tax.

A group calling itself the Retail Jobs Alliance has been set up by some of the country’s biggest chains, and has written to the chancellor to demand that he “cuts the shops tax”, Sky News reported today (5).

The alliance, which also includes the Co-op Group, Kingfisher, Morrisons and several retail trade bodies, in a letter told Chancellor Rishi Sunak that it is representing organisations employing more than one million people – or one-third of the entire industry’s workforce.

Retail Jobs Alliance would be “making the case for an overall cut in business rates for all retail premises, and we are open to the possibility of funding this through the introduction of a new online sales tax (OST)”, the letter said.

“Business rates – the Shops Tax – are a significant part of retailers’ overheads,” Sky News quoted the letter.

“A meaningful cut in the Shops Tax would make a big difference to retailers’ ability to invest more in the shops and stores that we know customers value, as well as to create jobs.

“This would make it easier for everyone in the retail sector to mitigate inflationary pressures, keep existing shops open and open new ones.”

The group added that the business rates burden had become most difficult retailers in areas of the country with the highest shop vacancy rates, pointing out that several of the Retail Jobs Alliance’s members “are businesses with significant online operations as well as physical shops, so would expect to pay any new OST as well as benefiting from a business rates cut”.

The latest push by retail industry giants comes amid a years-long debate about the balance between the taxation of physical and online retailers as consumers increasingly shift to digital channels.

A consultation on Online Sales Tax was launched in February by the Treasury.