Westfield issues retail taxes warning ahead of Budget
Shopping centre giant Unibail-Rodamco-Westfield has warned that higher taxes for the retail industry in tomorrow’s Autumn Budget would lead to inflation and low investment.
Reeves’ second Budget is widely expected to reveal a range of tax hikes after a bruising year for productivity and GDP growth.
Crucially for retail, the Chancellor is expected to unveil changes to business rates, a property tax on brick-and-mortar businesses.
The government has already announced a higher levy for properties worth over £500,000 and relief for those under half a million, but the exact rates are yet to be revealed.
Retail tax worries ahead of Budget
Katie Wyle, managing director of customer and retail operations in Northern Europe at Westfield, urged the Chancellor to “extend support to all retail, hospitality and leisure properties, not solely those under £500,000”.
“Failure to do so will not only impact businesses – many of whom are already suffering due to the abolishment of tax free shopping, but will also result in increased costs being passed onto the consumer, drive higher inflation and ultimately deter inward investment”, she added.
A host of other retail firms have warned that a tax on more valuable properties – often flagship stores on high streets – will hike bills and discourage high street shopping.
In particular, London is set to see an estimated 26 per cent in its total bill, from £9bn to £11bn, according to the Heart of London Business Alliance (HOLBA).
While retailers have been crying out for business rates reform for years, the response to the Non-Domestic Rates Bill has been largely negative.
High Streets UK has labelled the bill a “disaster for jobs, investment [and] growth” as it places “too great a burden” on the UK’s flagship high streets.
And two thirds of businesses subject to the government’s new business rate multiplier will increase prices to combat cost pressures, a survey has found.
“To protect the future of the high street and to drive nationwide growth, the government must lower rates for all physical retailers and ensure online giants start to contribute more fairly”, Wyle said.
She added that the government should “fix the relief system… so that landlords and owners can reinvest and bring vacant spaces back to life”.