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Retailers react to Autumn Statement

Retail leaders express diverse concerns, from Taxation to Business Rates, following Autumn Statement. Alex Baldock, CEO of Currys said: “It is deeply disappointing that the Chancellor has… View Article

COMMENTARY

Retailers react to Autumn Statement

Retail leaders express diverse concerns, from Taxation to Business Rates, following Autumn Statement.

Alex Baldock, CEO of Currys said: “It is deeply disappointing that the Chancellor has failed to address the unfairness of our business rates system, and in doing so has missed an opportunity to support retailers at a time of economic uncertainty. Under the current system retailers with stores, which provide millions of high-value jobs, will be hit with an additional £480million bill in April, while online-only businesses remain significantly under-taxed. The rates system is meant to reflect rental values, but with rental values falling it is unjustifiable for business rates to still be going up. If the Government is serious about supporting businesses of all sizes, promoting growth and reducing costs for consumers, it must urgently address our outdated and unfair business rates system.”

Vivienne King, Chair of the Shopkeepers’ Campaign commented: “In the current economic climate, raising the standard multiplier by 6.7 per cent should never even have even been considered. Business rates bills are already far too high, and they are now at their highest ever level. The Conservatives, who promised to reduce them for retail in 2019, have fundamentally broken their promise. While I am pleased to see the Chancellor extend the Retail, Hospitality and Leisure Relief for one more year, it is disappointing to see that the cap has not been extended to some support of the larger retailers that provide essential products and services on our high streets. This relief is an acknowledgement that business rates are too high and capping it at £110,000 means that retailers beyond the threshold are still having to pay rates in full.”

Scott Parsons, Chief Operating Officer UK, at Unibail-Rodamco-Westfield, said: “Although there is some relief for small business, once again the Chancellor’s lack of impactful reform to business rates is disappointing news for British retail. The industry is screaming out for permanent reductions to occupancy taxes, which still stand at up to ten times more than other European countries, putting the UK at a huge competitive disadvantage. On top of this, it’s a blow for the industry to see no moves towards an online sales tax to level the playing field between online and physical retailers, or reinstating tax-free shopping for international visitors to fuel tourist demand, boost consumer spend and support economic growth. This was the moment for clear, decisive action from the government, however yet again too few meaningful solutions have been offered to support sector growth, at a time when the industry needs it the most.”

Commenting Paul Martin, UK head of retail at KPMG, said: “The decision to reduce the personal tax burden offers some positive news for the retail sector, at a time when consumer confidence is low and households are reining in spending on the high street. Whilst the reduction in national insurance contributions will help put more money in the pockets of some households, it will do little to help the burden on lower income families or reduce the high food inflation levels that they are facing, and I would expect consumers to still remain cautious around non-essential spending in the medium term.

“Labour costs and a shortage in workers remains a big challenge for the retail sector, and whilst most larger supermarkets are already paying around the new living and minimum wage rates announced today in order to get the best people into roles, it is an additional cost burden facing smaller, independent retailers at a time when consumer demand is softening. What retailers would have liked to have seen is some final decision on the reform of business rates – a key issue that has been kicked down the road for too long.  Smaller and independent retailers were thrown a lifeline with the extension of the 75% business rates discount for a further year, but the uncertainty around one of their biggest costs as they navigate challenging economic times would have been much welcomed today and is an issue that can’t be put off for much longer.”

In positive news:

The government have confirmed they will extend the scope of the current VAT zero rate relief on women’s sanitary products to include reusable period underwear from 1 January 2024.

The news follows M&S ‘Say Pants to the Tax’ campaign, in partnership with WUKA, which launched earlier this year.

Commenting on the news, Victoria McKenzie-Gould, Director of Corporate Affairs at Marks & Spencer said: “Paying tax on period pants was a bum deal for women everywhere and it’s great to see the Treasury throw in the towel and axe the pants tax. I want to thank our campaign partner WUKA and the tens of thousands of individuals, politicians, brands and retailers who have thrown their weight behind our campaign to Say Pants to The Tax. This is a small change to the Treasury, but will make a big difference to women across the country. We’re delighted that the Chancellor has finished the job and levelled the playing field so that whatever period product someone chooses to use, it’s VAT free.”

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