Up to 400 large UK stores at risk of closure from property tax hike: BRC
The government has proposed higher business rates, or commercial property taxes, on sites with a rateable value of over £500,000
[LONDON] Up to 400 of the UK’s biggest shops, from supermarkets to department stores, are at risk of closure if the government forces them into its proposed higher business rates tax band, the British Retail Consortium (BRC) trade body warned on Friday (Sep 12).
The government has proposed higher business rates, or commercial property taxes, on sites with a rateable value of over £500,000 (S$869,160).
It wants this higher rate to fund a plan to make a temporary discount for smaller retail and hospitality businesses permanent.
“Given the small profit margins that exist across retail ... a significant rise in rates for large stores would force these shops to raise their prices, employ fewer people, or even close their doors entirely,” the BRC said. Britain’s finance ministry said on Thursday that Finance Minister Rachel Reeves will detail her plans for business rates in her Nov 26 budget statement.
Reeves is likely to raise taxes or cut spending in her budget, probably by more than £20 billion according to analysts, to remain on track to meet her fiscal rules and avoid unsettling investors.
Her first budget last year raised employers’ social security contributions and lowered the threshold for when firms start paying. It also hiked the minimum wage.
When a new packaging tax is also taken into account, the retail industry says it has faced a rise of £7 billion in annual costs, driving up prices.
The BRC said that if all 400 at-risk stores were to close, up to 100,000 jobs could be lost and local councils’ business rates receipts from retail would fall by over £100 million a year. REUTERS
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