Latest news with #tax raid
Times
3 days ago
- Business
- Times
Business rates hike would drive up food prices, chancellor told
Rachel Reeves has been warned that a tax raid on retailers in the budget in October would fuel inflation and drive up food prices heading into Christmas. Helen Dickinson, chief executive of the British Retail Consortium (BRC), said that a planned increase in business rates for large stores and supermarkets would 'add to inflation at the worst possible moment'. Dickinson, whose members include more than 200 big retailers, said many businesses were 'already at breaking point' and dealing with the 'knock-on effects' of Reeves's decision to increase employers' national insurance by £25 billion a year from this April. She also linked the issue to the Bank of England base rate, which affects mortgages for millions of homeowners, stating: 'It risks pushing up prices just as families are hoping for relief, and at a time when the Bank of England is trying to bring inflation down.'
Yahoo
4 days ago
- Business
- Yahoo
Supermarket bosses attack Reeves's plan for fresh tax raid
Tesco and Sainsbury's have warned Rachel Reeves that plans for a £1.7bn tax raid on big shops would accelerate the decline of the high street. The intervention by the country's two largest supermarkets marks a significant escalation in the backlash against the Chancellor's plans for a shake-up of the business rates system. Retail chiefs fear will Ms Reeves will deal another devastating blow to Britain's struggling town centres. Ken Murphy, boss of Tesco, told The Telegraph that the move threatened 'investments in customers, colleagues and communities'. His comments are likely to fuel fears of fresh price rises, redundancies and another cull of shops as retailers look to offset swinging cost rises introduced by a cash-strapped Labour Government at the last Budget. The reforms will increase business rates for department stores, supermarkets and those with larger premises. Mr Murphy said: 'Increasing the burden on large shops would hinder rather than help our town centres. Many of these shops are anchor stores in their local communities.' Simon Roberts, the Sainsbury's boss, predicted that retail's big beasts would 'pull away from our high streets' as they sought to weather a jump in National Insurance contributions and minimum wage increases. The sector is also concerned about the potential costs of of Angela Rayner's Employment Rights Bill. Mr Roberts said: 'The changes being proposed will further increase the negative impact of business rates and won't stimulate the growth or investment into our high streets and jobs that we all want to see. The Government promised fundamental reform to level the playing field but the changes we are hearing about will not deliver this – they will not stimulate growth or investment.' Opposition is also mounting beyond the big grocers. Alex Baldock, the boss of electricals giant Currys, accused Ms Reeves of 'rushing' changes to the business rates system that will have widespread implications for retailers already grappling with a tsunami of additional government-imposed costs. Jobs at risk Over-burdened retailers are already grappling with 'a perfect storm' of 'extra costs and red tape', which is 'bad for jobs, investment and growth,' he said. 'The mooted hikes in business rates will just make things worse.' Mr Baldock warned that the overhaul would 'shutter more stores' and 'leave more gaps on the high street', as well as harming employment opportunities for young people. Thierry Garnier, the chief executive of B&Q's parent company Kingfisher, warned that the Treasury's latest tax grab would harm 'communities across the UK'. The Chancellor is expected to use her next Budget to ramp up business rates in a desperate attempt to plug a £5bn hole in the public finances created by abrupt about-turns on benefits and winter fuel cuts. As part of efforts to level the playing field, businesses with bigger premises will be charged more in order to reduce the rates paid by smaller stores. The effective discount is intended to target online retailers and save independent firms, ministers contend. Last month, the British Chambers of Commerce warned that tax rises are 'paralysing' British businesses. One in three companies were cutting jobs to weather the £25bn National Insurance raid, it said. 'Larger physical stores, which support more jobs, should not be penalised through a higher multiplier,' Mr Garnier said. Pub bosses protest The hospitality industry is also braced for further pain with pub bosses queueing up to express their disquiet last week. Simon Emeny, the chief executive of Fuller's, said pubs were already labouring under 'a ridiculously disproportionate' £25bn business rates burden. Sir Tim Martin, the boss of JD Wetherspoon, complained that pubs were already having to contend with a 'ferocious tax disadvantage'. The sector maintains it is unfair that pubs pay VAT on food sales while supermarkets do not have to, enabling them to sell alcohol at a discount to pubs. Meanwhile, the Government's own analysis shows that the impact of the planned reforms will be felt far and wide from hotels, restaurants and theatres to cinemas, theme parks and even zoos. At the same time, only a fifth of those are warehouses used by internet retailers. In a speech to prominent City figures attending the Mansion House dinner in London on Tuesday evening, Ms Reeves claimed 'Britain is better off under Labour'. The Treasury was contacted for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Sign in to access your portfolio
Telegraph
4 days ago
- Business
- Telegraph
Supermarket bosses attack Reeves's plan for fresh tax raid
Tesco and Sainsbury's have warned Rachel Reeves that plans for a £1.7bn tax raid on big shops would accelerate the decline of the high street. The intervention by the country's two largest supermarkets marks a significant escalation in the backlash against the Chancellor's plans for a shake-up of the business rates system. Retail chiefs fear will Ms Reeves will deal another devastating blow to Britain's struggling town centres. Ken Murphy, boss of Tesco, told The Telegraph that the move threatened 'investments in customers, colleagues and communities'. His comments are likely to fuel fears of fresh price rises, redundancies and another cull of shops as retailers look to offset swinging cost rises introduced by a cash-strapped Labour Government at the last Budget. The reforms will increase business rates for department stores, supermarkets and those with larger premises. Mr Murphy said: 'Increasing the burden on large shops would hinder rather than help our town centres. Many of these shops are anchor stores in their local communities.' Simon Roberts, the Sainsbury's boss, predicted that retail's big beasts would 'pull away from our high streets' as they sought to weather a jump in National Insurance contributions and minimum wage increases. The sector is also concerned about the potential costs of of Angela Rayner's Employment Rights Bill. Mr Roberts said: 'The changes being proposed will further increase the negative impact of business rates and won't stimulate the growth or investment into our high streets and jobs that we all want to see. The Government promised fundamental reform to level the playing field but the changes we are hearing about will not deliver this – they will not stimulate growth or investment.' Opposition is also mounting beyond the big grocers. Alex Baldock, the boss of electricals giant Currys, accused Ms Reeves of 'rushing' changes to the business rates system that will have widespread implications for retailers already grappling with a tsunami of additional government-imposed costs. Jobs at risk Over-burdened retailers are already grappling with 'a perfect storm' of 'extra costs and red tape', which is 'bad for jobs, investment and growth,' he said. 'The mooted hikes in business rates will just make things worse.' Mr Baldock warned that the overhaul would 'shutter more stores' and 'leave more gaps on the high street', as well as harming employment opportunities for young people. Thierry Garnier, the chief executive of B&Q's parent company Kingfisher, warned that the Treasury's latest tax grab would harm 'communities across the UK'. The Chancellor is expected to use her next Budget to ramp up business rates in a desperate attempt to plug a £5bn hole in the public finances created by abrupt about-turns on benefits and winter fuel cuts. As part of efforts to level the playing field, businesses with bigger premises will be charged more in order to reduce the rates paid by smaller stores. The effective discount is intended to target online retailers and save independent firms, ministers contend. Last month, the British Chambers of Commerce warned that tax rises are 'paralysing' British businesses. One in three companies were cutting jobs to weather the £25bn National Insurance raid, it said. 'Larger physical stores, which support more jobs, should not be penalised through a higher multiplier,' Mr Garnier said. Pub bosses protest The hospitality industry is also braced for further pain with pub bosses queueing up to express their disquiet last week. Simon Emeny, the chief executive of Fuller's, said pubs were already labouring under 'a ridiculously disproportionate' £25bn business rates burden. Sir Tim Martin, the boss of JD Wetherspoon, complained that pubs were already having to contend with a 'ferocious tax disadvantage '. The sector maintains it is unfair that pubs pay VAT on food sales while supermarkets do not have to, enabling them to sell alcohol at a discount to pubs. Meanwhile, the Government's own analysis shows that the impact of the planned reforms will be felt far and wide from hotels, restaurants and theatres to cinemas, theme parks and even zoos. At the same time, only a fifth of those are warehouses used by internet retailers. In a speech to prominent City figures attending the Mansion House dinner in London on Tuesday evening, Ms Reeves claimed 'Britain is better off under Labour'. A Treasury spokesman said: 'We are a pro-business Government that is creating a fairer business rates system to protect the high street, support investment and level the playing field. 'To deliver our manifesto pledge and provide certainty and support to the high street we intend to introduce permanently lower tax rates for retail, hospitality and leisure properties from next year.'
Telegraph
15-07-2025
- Business
- Telegraph
Reeves's £1.7bn tax raid risks gutting high streets, retailers warn
Rachel Reeves's plans for a £1.7bn tax raid risks gutting Britain's high street, retail bosses have warned. The British Retail Consortium (BRC), which represents 200 major retailers, said high street brands may have to shut shops if the Chancellor pushes ahead with plans to charge larger stores higher business rates. The Telegraph revealed last weekend that Ms Reeves is preparing to launch a fresh £1.7bn tax raid on businesses in the autumn. Under a proposed shake-up of business rates, department stores and supermarkets are expected to be hit with higher tax bills. Helen Dickinson, boss of the BRC, said the proposals threatened to slam the brakes on retailers' investment plans, saying: 'If the Government includes shops within its new higher rates threshold, then many retailers will be forced to rethink their investment plans. 'The closure of larger stores would harm the local communities they support, costing jobs and reducing footfall in the area they serve.' While the Treasury has yet to decide the new rates, City sources last weekend voiced concern that the Chancellor would set any surcharge on bigger properties at the maximum possible level. It comes at a time when retailers are already grappling with higher costs, after the increase to National Insurance contributions and the recent minimum wage rise. In evidence submitted to Angela Rayner's department, Marks & Spencer said higher business rate bills would 'accelerate the decline of the high street by encouraging retailers to close larger high street stores'. Ms Dickinson said: 'If Government wants to improve high streets and help local communities, they must ensure that no shop pays more under their new rates reforms.' She said the outlook for retailers was 'not all bright and sunny'. The comments came amid concern that shoppers are becoming more wary over spending amid rising economic pressures. Figures on Tuesday showed shopper confidence fell back in June, with grocery data firm IGD saying 'escalating global tension and economic pressures left shoppers feeling uncertain in the year ahead'. It follows a period where sales ticked higher across the high street. Figures from the BRC revealed retail sales were up 3.1pc in the five weeks to July 5 compared to the prior year. The BRC said this was helped by increased sales of electric fans as the country was struck by heatwaves. Food sales were also up in the period, rising 4.1pc on last year, although this was partly driven by food cost increases. A Treasury spokesman said: 'To deliver our manifesto pledge and provide certainty and support to the high street we intend to introduce permanently lower tax rates for retail, hospitality, and leisure properties from next year. 'Unlike the current relief for these properties, there will be no cash cap on the new lower tax rates, supporting some of Britain's most loved high street chains to continue to create jobs and grow the economy.'
