Major retailers urge government to avoid tax hikes on high street stores

Leading supermarket chains and high street retailers have formally requested that the Prime Minister exclude the sector from any potential increases in business rates during the upcoming Budget. The Retail Jobs Alliance, which represents employers of more than one million people, has warned that the industry is currently facing unsustainable cost pressures. The group has specifically urged Andy Burnham to rule out raising the tax multiplier for stores with a rateable value exceeding five hundred thousand pounds, arguing that such a move would undermine the economic health of local communities.

The letter, which was reviewed by City AM, expresses support for the government’s recent decision to reduce business rates for pubs, clubs and live music venues. However, the alliance cautioned that retail stores are integral to the renaissance of high streets and cannot continue to invest in their communities if subjected to an ever-increasing tax burden. The trade body argued that the high street functions as a single ecosystem where pubs, restaurants and retailers all depend on vibrant town centres with strong footfall. It warned that reducing costs for hospitality businesses while simultaneously increasing them for retail risks weakening this interconnected economic structure.

The retailers contend that the sector is already the most heavily taxed in the United Kingdom relative to its economic output. They noted that retail accounts for five per cent of gross domestic product but contributes twenty-one per cent of all business rates. The group highlighted that the seven billion pounds added to the retail cost burden at last year’s Budget acts as a direct driver on consumer prices. They stated that further increases would place significant pressure on retailers’ ability to support customers through competitive pricing and cost of living initiatives, while also threatening employment opportunities across the country.

The Retail Jobs Alliance includes major names such as Tesco, Sainsbury’s, Marks and Spencer, Primark, Morrisons and Kingfisher, the owner of B and Q. The letter was also backed by Usdaw, the United Kingdom’s fifth-largest trade union. The group called on the Prime Minister to exempt all brick-and-mortar retailers from the highest business rates multiplier, which currently stands at fifty point eight pence. They argued that this measure would safeguard retail employment and support the government’s commitment to growth in every postcode.

This appeal follows previous calls from the Real Rates Reform Alliance, which has suggested hiking taxes on online sales to fund a thirty-seven per cent tax cut for physical shops. Last month, various industry bodies criticised the government for a piecemeal approach to business rates reform after the announcement of a review into the fairness of the system for pubs and hotels. Shortly after taking office, the Prime Minister announced a twenty per cent cut to the business rates bill for all pubs in the United Kingdom.