Industry SectorsConsumer/RetailUK Retail Sector Tax Bill Rises 65% in Seven Years

UK Retail Sector Tax Bill Rises 65% in Seven Years

The UK’s major retail groups have seen their tax bill rise by 65% since 2005 according to a report by PwC, which says that retailers are now burdened by taxes outside corporate tax.

The tax burden has increased by almost two-thirds in the past seven years to stand at £8.3bn for companies counted in the Hundred Group of companies. Retailers belonging to the Hundred Group had a total tax rate of 59%, compared with an average of 39% across all industries in the group.

The UK government has cut tax rates, and is steadily reducing the corporate tax rate, which fell from 28% to 24% in April and will be further reduced to 20% by 2015. However, correspondingly there has been a surge in business rate and employer’s contribution to national insurance (NI) by almost 80%. The PwC study also says retailer in the Hundred Group have paid 11% more tax in the past seven years.

A number of major UK retail names have either departed from high streets in the past five years, such as the demise of Woolworths in late 2008, or have been rescued from imminent insolvency such as the deal by restructuring specialist Hilco earlier this year to
acquire music retailer HMV
. The recessionary conditions in much of Europe, coupled with tough competition from online retailers, have put UK’s bricks-and-mortar stores in difficulty.

The PwC report said that for every £1 of corporation tax, the retailers bore almost £2.40 in other taxes. However, online retailers not only are exempt from paying the costs bricks-and-mortar retailers have to bear, but also other costs like insurance payments. The British Retail Consortium (BRC) has lobbied for alternate taxation for online retailers, possibly a form of transaction tax, which will level the playing field for all.

The BRC has voiced concerns about the prevailing tax regime for retailers and has also claimed that the present structure is unsustainable.

Related Articles

Ethnic diversity in top companies improves

Consumer/Retail Ethnic diversity in top companies improves

9m Graham Buck
Europe’s retailers turn to omni-channel

Clearing & Settlement Europe’s retailers turn to omni-channel

10m Graham Buck
Open minds will deliver the best from open banking

Automation Open minds will deliver the best from open banking

10m Erik Zingmark
Does a treasury management system always fit the bill?

Automation Does a treasury management system always fit the bill?

10m GTNews
Five measures to protect against ransomware attacks

Baltics Five measures to protect against ransomware attacks

11m Mike Gillespie
Cybercriminals turn their attention to retail

Baltics Cybercriminals turn their attention to retail

11m Graham Buck
Amazon swallows Whole Foods in US$13.7bn deal

Consumer/Retail Amazon swallows Whole Foods in US$13.7bn deal

11m Graham Buck
From beer to blockchain - innovations in supply chain finance

Asia Pacific From beer to blockchain - innovations in supply chain finance

11m Richard Hartung