The UK has a “golden opportunity” to reform business rates for a retail sector that’s “overtaxed”. And without such reform, thousands more stores could close.

That was the message from the British Retail Consortium on Friday as it unveiled new research showing retailing “is overtaxed compared to other sectors of the economy”.

Retail pays 7.4% of all business taxes at £33bn, a share 1.5 times greater than its share of the overall economy (it accounts for 5% of GDP). 

This bill amounts to 55% of the industry’s pre-tax profits, the highest proportion, along with hospitality, of all main business sectors. 

The BRC said the impact of such excessive taxation is very clear with “shuttered shops and declining high streets in every corner of the country”.

It acknowledged that the Labour Party had recognised this in its pre-election manifesto that said: “The current business rates system disincentivises investment, creates uncertainty and places an undue burden on our high streets.” 

But now it wants those words to be translated into action after the country lost 6,000 shops in the last five years with decisions around two-thirds of those closures having been “materially” impacted by business rates.

And the BRC added that “without action, up to 17,300 shops could close over the next decade”.

It also said the issue is denting “investment in pay and upskilling for colleagues, and in the technology that will boost productivity, support decarbonisation, and drive economic growth”.

The research comes shortly before the new government’s first Autumn Budget and sees the BRC calling on it to “introduce a 20% Retail Rates Corrector – a 20% adjustment to bills for all retail properties. This would meet the manifesto commitment to reform the business rates system and to restore Britain’s declining high streets, and would immediately unlock investment and growth, another priority for the government”.  

BRC CEO Helen Dickinson said: “Our research conclusively proves what retailers have known for years: the industry is paying far more than its fair share of tax. The Chancellor has a golden opportunity to fix this and use the scale of the industry to help deliver some of the government’s priorities.”