Retail giants demand tax cuts: Pressure on Rachel Reeves mounts

The leading representatives of Marks & Spencer and Sainsbury's are spearheading a concerted call to Rachel Reeves to reduce the tax burden for retailers. In the face of claims that the sector pays "more than its fair share" into the state treasury, leading British retailers are calling for a reduction in business rates. In an open letter published on Monday, more than 70 executives of major retail companies express their concern about the current tax policy. They appeal to Ms. Reeves to level the playing field by reducing the rates for commercial properties in her next budget plan. The retail sector pays significantly more taxes than other industries, and they are calling for the announcement of a so-called "editor" to reduce business rate payments by 20 percent. The signatories include senior representatives from Morrisons, Currys, and others. They argue that a reduction in business rates not only addresses the injustices in the system but also has positive social and economic impacts on communities and distributes the tax burden more equitably across the economy. The demands follow years of criticism of the existing business rates, which have been condemned as a "growth tax" and criticized for favoring online businesses. According to the consultancy group Altus, companies in England pay £7.4 billion more in business rates annually than in 2010. Retail leaders express their concern that the tax burden has an "adverse socio-economic effect" on local communities, particularly through store closures and job losses. They emphasize that the tax has played a "material" role in the closure of two-thirds of the 6,000 stores closed since 2019 and hampers current investments such as salary increases and technology upgrades. The letter was initiated by the British Retail Consortium and signed by leading industry figures including Stuart Machin of M&S, Simon Roberts of Sainsbury's, as well as Rami Baitiéh of Morrisons and Peter Jelkeby of IKEA UK and Ireland. Other signatories include the CEOs of Aldi, Asos, Primark, WH Smith, and the UK CEO of Tesco. The Labour Party has indicated that it plans to reform the business rates system to make it fairer for traditional shops. This comes at a time when Reeves plans to announce tax increases and spending cuts to cover a claimed budget deficit of £22 billion. Sainsbury's CEO Simon Roberts warned last week about customer reticence due to uncertainty over fiscal decisions, which could lead to a decrease in spending on non-essential goods. Henkel Murphy, the CEO of Tesco, urged the government to work closely with businesses on all impending changes and to utilize a planned consultation to promote productivity while protecting workers.