Tax burden for largest retailers increases 65% since 2005

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The tax burden on Britain’s largest retailers has increased 65% since 2005, according to the latest PricewaterhouseCoopers report. Retailers are feeling the impact of the shift in business taxes towards indirect taxes and business rates (taxes that hit their profits). The retailers in the Hundred Group now have a total tax rate of 59%, compared with an average of 39% across all industries in the Hundred 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.

Data analysed by PricewaterhouseCoopers across the UK retail sector as a whole support these findings. The most recent data on business rate contributions shows these have increased by over 30% between 2008 and 2010. After a fall of 14% from 2007, retail corporation tax payments increased by over 6% from 2008 to 2012.

Christine Cross, chief retail adviser to PricewaterhouseCoopers commented: “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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