Electronic tax

UK retail giants form alliance to demand end to ‘shop tax’

Some of the UK’s largest and most influential high street retailers have formed a temporary group called the Retail Jobs Alliance in a bid to force an overhaul of Britain’s outdated retail tariffs.

Grocery giants Tesco, Sainsbury’s and Morrisons are among those who have agreed to back the Alliance in a fresh push to reform the UK’s controversial trade tariffs and demand the introduction of a new sales tax in line.

The coalition is urging Britain’s Chancellor Rishi Sunak – the most powerful political figure by purse strings – to tear up Britain’s decades-old trade tariff regime, which has long been a source of consternation for in-store retailers and the main street and the shops. center owners.

They claim that the punitive nature of trade tariffs ignores the pressure under which brick-and-mortar retail operates and also confers a huge commercial advantage to online players and e-commerce specialists, thereby creating an unequal playing field.

While the call to arms is nothing new, the fact that many of the most powerful retail names and biggest employers in the UK have joined forces is another important step.

Retail Jobs Alliance calls for change

The formation of the Alliance was broken by the broadcaster Sky News this morning, who reported that the Retail Jobs Alliance has not only been formed, but has already written to the Chancellor demanding that he “reduce tax on shops”.

In a letter to Sunak, the new alliance – which also includes the Co-op Group, Kingfisher, Waterstones and the Greggs food chain, as well as a number of retail bodies – said it was writing on behalf of organizations collectively employing more than one million people. , equivalent to one-third of the entire industry’s workforce.

He said the Retail Jobs Alliance would “advocate for an overall business rate reduction for all business premises, and we are open to the possibility of funding this through the introduction of a new online sales tax.” (OST)”.

Business rates have been reviewed and in February the UK Government’s Treasury launched a consultation on the introduction of an online sales tax following business rate reform which it said would allow save businesses $8.8 billion.

Lucy Frazer, Financial Secretary to the Treasury, said at the time: “While we have not made a decision on whether to introduce such a tax, it is only fair that, given the growing trend of consumers to buy online, we were working with stakeholders to assess the appropriate taxation of the retail sector.

In their letter to Sunak, the retailers said they were “deeply concerned about the pressures on household budgets and the rising cost of living”, and asserted that a “significant reduction in the tax on shops ” would strengthen the ability of retailers to invest more in stores and create jobs, adding: “This would make it easier for all players in the retail sector to mitigate inflationary pressures, keep existing stores open and ‘open new ones.’

Business rates weigh on small stores

The group pointed out that the burden of commercial tariffs fell heaviest on retailers in areas of the UK with the highest number of empty stores, citing research carried out last year, as it pointed out that several of the members Retail Jobs Alliance “are businesses with significant online operations as well as physical stores, so would expect to pay any new OST as well as benefit from reduced business rates.”

Signatories to the letter included Ken Murphy, CEO of Tesco; Sainsbury’s boss Simon Roberts; Thierry Garnier, CEO of Kingfisher; Shirine Khoury-Haq, Acting General Manager of the Co-op Group; and Rosin Currie, CEO designate at Greggs.

WPI Strategy, the political and economic consultancy advising the new coalition, which will be temporary, said it intended to respond to the Treasury consultation, which ends this month.