Feb 22, 2021
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Many more retail jobs at stake unless government acts on business rates - M&S boss

Feb 22, 2021

Marks & Spencer boss Steve Rowe has urged the government to use a proposed increase in corporation tax to overhaul business rates and rescue the battered UK high street.

M&S's boss has called for business rates reform - Photo: Sandra Halliday

Rowe said that unless the “unbearable yoke” of business rates is slashed, the “seismic upheaval” caused by the pandemic would lead to thousands more job losses. Over 200,000 store jobs were lost last year and 16,000 stores were forced to close, mostly due to the effects of the pandemic.

He’s calling for a 33% business rates cut, funded with a corporation tax rise of 19%-22%. The plea comes ahead of chancellor Rishi Sunak’s crucial 3 March budget when an announcement on changes could come.

“The ever-increasing burden of rates has become an unbearable yoke around the neck of thousands of shopkeepers, and their communities”, Rowe told The Daily Mail.

He added: “Our sector faces the fight of its life and the government needs to act on its forthcoming review on rates. The fairest way to tax is based on profit. By our calculations, a minimal increase in corporation tax would fund our proposed reduction for all ratepayers”.

Rowe noted that the retail sector pays a quarter of all rates, even though it only makes up 5% of the economy.

The growing calls for business reforms have come from a string of high-profile retail bosses. Last week, Next boss Lord Wolfson called for retail business rates to be slashed by 35% while the tax on warehouses used by online businesses could be increase by 50%. However, he rejected calls for introducing an outright tax on online sales.

He told the BBC that unless the government sets rates at a level that is fair, a huge number of stores will have to close unnecessarily. He said the current system was "unfair" to bricks and mortar retailers, many of whom are struggling in the pandemic.

Supermarket giant Tesco has also led calls for an online sales tax. And Kevin O'Byrne, finance chief at Sainsbury's, told the Daily Mail: “Taxation is completely out of step with the way retail and customer shopping patterns have changed. Without urgent reform, it will be increasingly challenging for high street shops to survive”. 

Julian Dunkerton, the founder of Superdry, who backs an online sales tax, added: “The business rates system is killing our high streets. If nothing is done, it will cause damage to our town centres which they will never come back from.’

However, despite the call for immediate changes to the business taxation system, chancellor Rishi Sunak is set to delay the Treasury’s report on the “fundamental review of business rates” until the autumn.

However, the business rates holiday in England, due to end on 31 March, is expected to be extended into the summer, along with the furlough scheme. Sunak is expected to confirm these moves in his budget next week

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