Several of the UK’s largest companies have joined together under an alliance to call on Chancellor Rishi Sunak to reform the UK’s ‘decades old’ business rates system.

The Alliance has been set up by some of the UK’s high street big hitters, including supermarket chains Tesco, Sainsbury’s, and Morrisons, as well as a co-operative conglomerate, Kingfisher. Other chains including Waterstones, Greggs, and several other retail trade bodies have also pledged their support.

Why the need for reform?

Business rates are charged on most non-domestic properties, and you will probably be familiar with business rates if you use a building or part of a building for non-domestic purposes.

The call for reform to the business rates system is not new, however, some of the UK’s biggest employers and powerful retail names joining forces to state their case is a new and significant step towards reform.

The argument for lowering business rates is tied to the after effects of the COVID-19 pandemic, the cost-of-living crisis and the impact both of these have had on Britain’s high streets, which are packed with empty premises as customers flock online for their goods.

What do they want?

The Alliance stated that it 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 an online sales tax’.

In their letter to Sunak, the retailers said they were ‘concerned by pressures on the household budget and the rising cost of living’ and added that ‘meaningful cuts in store tax’ could improve retailers’ ability to invest more in stores, create more jobs, and ease the pressures inflation has put on the retail sector.

The group cited research that suggested that half of all non-food sales will be made online by 2025 while ‘physical shops are taxed far more heavily than this newer and rapidly-growing part of the retail sector.’

The letter went on to say that the Alliance ‘welcomed the commitment that any online sales tax would be used to fund reductions in business rates for retailers’ as it would ‘level the playing field’ between online and bricks-and-mortar retailers ‘at a time when Covid-19 has accelerated shifts in retail which were already in evidence before the pandemic.’

The Retail Jobs Alliance urged the chancellor to include all retailers, not just smaller ones, in any cut in business rates.

It insisted doing so ‘could significantly boost the social fabric of our villages, towns and cities.’

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