Nearly 50 retail leaders, including Aldi, Boots, Ikea, M&S, Sainsbury’s and Tesco, have written to Chancellor Jeremy Hunt urging him to freeze the business rates multiplier set to be announced at the upcoming Autumn Statement.
The retail industry currently pays over £7 billion a year in business rates. The British Retail Consortium (BRC) noted without action from the government, the business rates multiplier will rise in April 2024 in line with the September inflation figure – expected to be over 6 per cent – amounting to an increase of over £400m a year to retailers’ business rates bills. The retail body stated that such an increase in costs could lead to upward pressure on prices, just as shop price inflation has begun to ease.
A recent survey of BRC members showed that 68 per cent of retailers were "very concerned" about the business rates increase and that all of them felt it would place some pressure on shop prices, with 69 per cent saying it would place ‘significant pressure’ on the prices paid by customers. Furthermore, all retailers noted that the rates increase would hold back investment, including in new shops and warehouses.
The letter has been signed by 44 leading retailers and notes the exceptional challenges facing the industry and the efforts being made to absorb existing rising costs in the supply chain.
Helen Dickinson, Chief Executive of the BRC, said: “The Chancellor must freeze rates to help keep a lid on retailers’ already high costs. With shop price inflation having eased for three consecutive months, it is vital that the Government does not add to the cost burden and undermine this progress.
“A £400m rates rise will also cost jobs, harm the economy, and damage the vibrancy of our town and city centres. While other business taxes, such as Corporation Tax and VAT, rise and fall with the movements in the economy, Business Rates must be paid in full whether firms are making a profit or a loss. This makes Business Rates the difference between retailers being forced to close existing stores rather than opening new ones.”
