More than 70 CEOs from leading UK retailers have written to the chancellor, Rachel Reeves, calling for the introduction of a retail rates corrector as part of the government’s commitment to reforming the business rates system.
In an open letter coordinated by the British Retail Consortium (BRC), the CEOs said “now is the time to level the playing field between industries” to stem the tide of retail store closures and unlock new investment in jobs, shops and communities.
The letter said the introduction of a retail rates corrector – a 20% downward adjustment in business rates paid on retail properties – would “redress the imbalance” which sees the retail industry pay 7.4% of all business taxes (£33bn) – a share 1.5 times greater than its share of the overall economy (5% GDP).
The letter was signed by the CEOs of companies including M&S, Tesco, B&Q and Aldi.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Retail has been the golden goose, generating tax revenues far beyond the industry’s size, but the current situation is not sustainable. The government should act to rebalance the system and ensure all industries are paying their fair share. This in turn would drive increased retail investment in people, places and communities. The budget is the perfect opportunity to lay the groundwork for local investment that delivers for retail’s customers, delivers for its employees, and delivers for the economy.
In a separate initiative, Avison Young has urged the Labour government to take immediate and decisive action to address the growing burden of business rates on companies across England and Wales, with a strong focus on freezing the Uniform Business Rate (UBR) at 49.9p in the short term and reducing it to 40p by 2029.
The company has called on the government to decouple business rates from annual inflationary increases, starting with no increase in the UBR for the 2025/26 tax year. The firm predicts that the 2026 revaluation offers scope to then drive down the UBR from April 2026 to below 44p, providing much-needed relief for businesses grappling with rising costs and economic uncertainty.
David Jones, principal and managing director of business rates at Avison Young UK, said: “In the face of rising costs, and global uncertainty, it is crucial for the government to act decisively on business rates. We consider there are a set of very deliverable solutions which the government can afford and will make a real difference. Rachel Reeves should be bold and decouple the business rates system from inflation, starting with no inflationary increase from next April. Delivered with a 2026 revaluation, this offers the potential for this government to deliver a 40p tax rate (UBR), by 2029.
“Simplifying and reforming the relief system is essential to reduce administrative burdens and target relief effectively. Continuing upward transitional relief and extending improvement relief will support businesses and encourage investment in commercial properties. We also support efforts to digitise the system for greater efficiency and transparency. Avison Young is committed to working with the Labour government to implement these reforms and ensure a sustainable future for UK businesses.”
