The British Independent Retailers Association (Bira) is urging the government to use the Budget to ease pressure on retailers from property taxes, employment costs and energy bills.
UK independent retailers could face a 25% increase in business rates next year unless the government intervenes, the trade association has warned, calling for measures to curb rising operating costs in the 28 October Budget.
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The projected increase, which excludes inflation, could squeeze already tight profit margins and threaten the viability of some shops, according to the trade association.
Business rates are taxes on non-domestic properties, including shops and other commercial premises.
“Such an increase is simply not sustainable in the current climate,” said Bira chief executive Andrew Goodacre.
He warned that higher bills could determine whether some independent retailers remain open or close permanently.
Bira has welcomed reports of a proposal to fund business rates cuts by requiring online marketplaces to collect value-added tax (VAT). It wants the Chancellor, the UK’s finance minister, to confirm that any revenue raised would go towards rates relief for high street shops.
Employment costs weigh on recruitment
Bira is also calling for an increase in the Employment Allowance, which reduces eligible employers’ National Insurance contributions, the payments businesses make towards the UK’s social security system.
The association said employment costs have risen significantly over the past two years, during which the retail sector has lost around 100,000 jobs. It added that higher employer National Insurance contributions continue to put pressure on smaller businesses.
“The NIC increases are still damaging,” Goodacre said.
He argued that easing employment costs would help independent retailers recruit staff, particularly younger workers who often gain their first customer service experience and workplace skills in local shops.
For smaller retailers, employment costs can influence decisions about recruitment and staffing levels, making them an important consideration as businesses seek to manage overheads.
Retailers seek more flexible energy contracts
Energy prices are another concern ahead of winter. Bira wants smaller businesses to have greater flexibility to switch suppliers and secure more competitive deals as market conditions change.
“Too many small businesses are locked into rigid energy contracts with little room to move when prices change,” Goodacre said.
He argued that independent retailers should have the same freedom as household customers to compare energy deals and switch suppliers, helping them manage operating costs.
Greater flexibility, the association says, would give retailers more scope to respond to changing energy prices and control their overheads.
Budget support could ease pressure on high streets
Bira said action on business rates, employment costs and energy bills would give independent retailers greater scope to invest in their businesses and sustain employment.
“Action on business rates, employment costs and energy would give them the headroom they need to invest, employ and keep our high streets thriving,” Goodacre said.
The Budget could provide an opportunity for the government to address the cost pressures facing independent retailers. The scale and design of any support will be important for shops seeking to protect margins, maintain staffing levels and remain competitive.
