Without addressing both business rates and tax-free shopping, the high street will struggle to thrive, a leading audit, tax and consulting adviser to mid-market business leaders RSM UK has warned.
Biggest retailers will be slapped with a £400 million increase in business rates next year as Jeremy Hunt looks to prioritise corporate tax reliefs that promote investment.
Jacqui Baker, head of retail at RSM UK, said, ‘With subdued growth in retail sales in recent months, and as retailers continue to grapple with increasing cost pressures, the prospect of a rise in business rates next year will be crippling news for some.
"Retailers are already battling through a challenging Golden Quarter this year and with four in ten consumers planning to reduce their spending on clothing* this Christmas, this is yet another blow to the industry during one of its busiest periods.
The chancellor is understood to have decided against freezing rates for larger retailers despite warnings that an increase would cost jobs and push up prices. Business rate bills for larger retailers could rise by 6.7 per cent in the spring, The Times reported.
"Freezing business rates will be vital for the survival of many retailers, so it will be disappointing if this isn’t on the agenda in the Autumn Statement. Whilst freezing rates will provide significant relief, what’s needed is delivering real reform that is fit for purpose.
"Retailers are also facing fierce competition from European counterparts who are able to offer tax-free shopping, putting the UK at a real disadvantage. Whilst it’s great news that international travellers are back, they’re spending less and are choosing to splash out on designer goods in Europe. A U-turn on the tourist tax would be hugely beneficial for the sector and the economy. Without addressing both business rates and tax-free shopping, the high street will struggle to thrive, and in some cases survive."
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