Written by: Keith Tully
Published: 5th February 2020
An increase to corporation tax rates should be introduced to fund a cut to business rates that would help to save the high street from its current state of decline.
That’s the conclusion of a government-commissioned report looking at the challenges being faced by the retail sector across the country.
According to Sky News, a sub-committee of the Retail Sector Council will soon be advising the government that it should seek to raise money through increased corporation taxes so that a £6 billion worth of business rate cuts can be introduced.
Business rates and the regime surrounding them have been heavily criticised by representatives of the retail sector in recent years, with the essential claim being that they disproportionately impact high street operators and make it considerably more difficult for them to remain viable in many cases.
Hundreds of thousands of jobs have been lost and thousands of shops have been closed on British high streets in recent years, with all manner of retailers feeling the financial squeeze and struggling to stay afloat.
The latest figures from the Office for National Statistics show that retail sales across the country failed to rise during December for the fifth successive month.
According to the British Retail Consortium, no increase in sales was recorded across the retail sector during the whole of 2019, which represents the first full year of declining sales totals ever recorded.
Against this backdrop, the government-commissioned a sub-committee in 2018, which has been putting together recommendations and ideas that might help to revive the fortunes of high street retailers.
The Retail Sector Council is led by Richard Pennycock, formerly the chief executive of the Co-op and current chair of the department store chain Fenwicks, who is co-chairing the council with the minister for small businesses Kelly Tolhurst.
Other retail industry figures contributing to the deliberations of the council include Nick Beighton, formerly the chairman of the John Lewis Partnership and Elizabeth Fagan, a former managing director of Boots UK.
Raising the money to cover the £6 billion business rates cut is estimated to require a 2 per cent increase in the UK’s headline rate of corporation tax.