UK Retailers Warn PM Tax Hikes Could Fuel Food Inflation

Key facts

• Major UK retailers have warned Prime Minister Andy Burnham against potential tax increases in the upcoming Budget.
• Retailers argue that hiking business rates for larger stores could force price increases, impacting consumers.
• The Retail Jobs Alliance (RJA) stated that retail is the UK's most-taxed sector relative to its economic output.
• The RJA warned that additional taxes could push inflation above 5% into the following year.
• Retailers called for brick-and-mortar stores to be exempt from the highest business rates multiplier.

Major UK retailers, including Tesco, Sainsbury’s, and Marks & Spencer, have urged Prime Minister Andy Burnham to reject potential tax increases in the upcoming Budget, warning that current costs are already "unsustainable." The Retail Jobs Alliance (RJA), which represents over a million retail employees, expressed concern that the government might raise business rates for larger retailers to offset reductions for pubs, bars, and live music venues. The RJA highlighted that retailers are integral to high street revitalization and cannot continue investing in communities if faced with an increasing tax burden. They argued that a hike in business rates for retail would weaken the high street ecosystem, as pubs and restaurants rely on strong footfall generated by shops. The trade body also stated that retail is the UK's most-taxed sector relative to its economic output, paying 21% of all business rates despite representing only 5% of GDP. Retailers warned that the £7 billion added to their cost burden in the previous Budget is a direct driver of price increases, and further hikes would pressure their ability to offer competitive pricing and employment opportunities. The RJA, which also represents Primark, Morrisons, and B&Q-owner Kingfisher, called for all brick-and-mortar retailers to be exempt from the highest business rates multiplier. The British Retail Consortium warned that imposing business rate surtaxes on approximately 4,000 large shops could push inflation above 5% into the following year.