Greggs has joined a coalition of retailers including Tesco, Sainsbury and Waterstones which are urging Chancellor Rishi Sunak to reform the business rates system.
Sky News reports a group calling itself the Retail Jobs Alliance has been set up by the high street chains, and are calling on the chancellor to “cut the shops tax”.
The alliance will be “making the case for an overall cut in business rates for all retail premises, and we are open to the possibility of funding this through the introduction of a new online sales tax (OST)”.
It comes amid fierce debate about the balance of taxation between physical and online retailers as consumers shift to digital channels.
In February, the Treasury launched a consultation on the merits of an online sales tax in the wake of a business rates review that it claimed would save companies £7bn.
“Whilst we’ve made no decision on whether to introduce such a tax, it’s right that, given the growing consumer trend to shop online, we work with stakeholders to assess the appropriate taxation of the retail sector,” Lucy Frazer, financial secretary to the Treasury, said at the time.
In their letter to Sunak, the retailers said: “We are all, like you, acutely concerned with pressures on household budgets and the rising cost of living, and we all have a role to play in keeping costs down as far as we can.
“Business rates - the Shops Tax - are a significant part of retailers’ overheads.
“A meaningful cut in the Shops Tax would make a big difference to retailers’ ability to invest more in the shops and stores that we know customers value, as well as to create jobs.
“This would make it easier for everyone in the retail sector to mitigate inflationary pressures, keep existing shops open and open new ones.”
The group added that the business rates burden had become most onerous for retailers in areas of the country with the highest shop vacancy rates, according to research carried out last year.
It pointed out that several of the Retail Jobs Alliance’s members “are businesses with significant online operations as well as physical shops, so would expect to pay any new OST as well as benefiting from a business rates cut”.
It went on: “But we agree that cutting the Shops Tax must be a policy priority, and that an OST would be acceptable as part of a package of retail tax reform that rebalances the system so that it better reflects how retail works now and helps protect the shops which so many people want to see in their communities.
“Given this, it is important that all retailers, not just smaller ones, are included in any cut in business rates which an OST helps to fund.”
Doing so “could therefore significantly boost the social fabric of our villages, towns and cities,” it claimed.
