The British Independent Retailers Association (Bira) is calling on the government to address the financial strain on retailers caused by property taxes, employment costs, and energy bills in the upcoming Budget. Independent retailers in the UK face a potential 25% rise in business rates next year without government intervention.
This projected increase, excluding inflation, could further tighten profit margins and jeopardize the survival of some stores, Bira warns. Business rates are levied on non-residential properties, such as shops and commercial buildings.
Andrew Goodacre, Bira’s chief executive, stated, “Such an increase is simply not sustainable in the current climate.” He emphasized that higher expenses could force some independent retailers to shut down permanently. The consequences of inaction would be significant, and government intervention is key.
Bira supports the proposed plan to reduce business rates by mandating online marketplaces to collect value-added tax (VAT). They urge the Chancellor to allocate the generated revenue for rate relief aimed at high street shops, which would ease the burden on independent retailers.
Over the past two years, employment costs have surged, resulting in approximately 100,000 job losses in the retail sector. Bira advocates for raising the Employment Allowance, which reduces National Insurance contributions for eligible employers. This measure would facilitate staff recruitment, especially for younger workers who often acquire customer service skills and workplace experience in local shops.
Goodacre highlighted that reducing employment costs would enable independent retailers to hire more staff. Energy prices are another pressing issue as winter approaches, and Bira seeks greater flexibility for small businesses to switch suppliers and secure better deals.
Goodacre noted, “Too many small businesses are locked into rigid energy contracts with little room to move when prices change.” He argued that independent retailers should have the same flexibility as households to compare energy deals and switch suppliers, helping them manage operating costs. This flexibility is vital for their competitiveness.
According to Bira, addressing business rates, employment costs, and energy bills would allow independent retailers to invest in their businesses and maintain employment. Goodacre said, “Action on business rates, employment costs and energy would give them the headroom they need to invest, employ and keep our high streets thriving.”
