By Daniel Hunter
A new report has revealed that the UK's leading retailers have seen their tax burden increase by 65%.
Many retailers have felt the effect of the shift in business taxes towards indirect taxes and business rates, and those in the Hundred Group now have a total tax rate of 59%, compared with an average of 39% across all industries in the group.
Despite the Government reducing the corporation tax rate, payments of corporation tax by these retailers have increased 11% over the period while other business taxes including business rates and employers national insurance contributions have increased by almost 80% since 2005.
“Governments looking for stable tax revenues have rebalanced business taxes so there is less reliance on corporation tax, which is inevitably volatile as it is dependent on profits," Richard Podd, director, PwC Newcastle, said.
"For every £1 of corporation tax, the UK’s largest retailers now pay almost £2.40 in other taxes out of their profits. The rise in business rates in particular is felt by retailers given their large property portfolios.
“Retail in the UK not only gives domestic employment, but also stimulates consumer confidence and makes a significant contribution to the public purse. However, high business rates represent a significant burden for those still trying to balance physical stores with online retail.”
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