Home Retail Tax and training reforms ‘vital to safeguard UK’s £352bn retail industry’

Tax and training reforms ‘vital to safeguard UK’s £352bn retail industry’

by Ozva Admin

Urgent reforms of the UK’s outdated trading fee system and inflexible apprenticeship levy are essential to support a retail and wholesale industry that underpins economic activity in every town and city across the country.

New research from CBI Economics, conducted on behalf of the CBI and its retail members, reveals that retail and wholesale activity is now worth £352bn a year to the UK economy. It supports one in five jobs in the country, with 5.7 million people employed in the sector or its suppliers.

The data shows that 20 per cent of UK constituencies rely heavily on the economic contribution of the sector for more than a fifth of their GVA and employment. This also adds substantial benefits to the public purse, with retailers and wholesalers paying £50bn in tax, enough to fund 110 new hospitals a year.

However, the fallout from Covid and the war in Ukraine continue to weigh heavily on the sector, and an inflation-related 10 percent trade rate hike expected in the spring risks plunging many businesses into a fight for survival. A slow repricing system also means retailers and wholesalers are already overpaying, with many facing liabilities as high as rents.

That is why the CBI, with the support of the British Retail Consortium (BRC), is urging the Government to rethink the planned increase and implement longer-term reforms that reward investment.

The CBI also wants to see more flexibility in the apprenticeship levy, a move that could have a huge impact on a sector that already spends £4bn a year on training. This equates to a tenth of all spending on training in the UK.

Together, these measures could spark renewed optimism and investment in a sector that plays a vital role in communities, the broader economy and UK plc’s growth prospects.

Matthew Fell, CBI Chief Policy OfficerHe said: “Retail and wholesale businesses have remained at the epicenter of every economic ecosystem in the UK through crises from the pandemic, the war in Ukraine, supply chain disruption and rising costs.

“The sector has often been the first line of defense during these economic downturns and continues to prioritize supporting households, as well as their employees, through these challenges.

“Now that economic growth is a national imperative, industry is once again leading the charge. Retailers and wholesalers continue to invest heavily in training their employees, not only decarbonizing their own operations, but also helping their customers reduce their carbon footprint; and We’re leveling up in action, as anchor points on Britain’s high streets.

“Amid unprecedented levels of inflation and a cost-of-living crisis, it has never been more important for retail and wholesale to run flat out.

“That is why we are calling on the government to soften the edge of the looming business rate cliff – without intervention, the surprise hikes scheduled for April will present an existential threat to many businesses communities depend on. investment-enhancing ideas and new learning tax ideas can help future-proof the sector and spur further growth.

“While this is a fragile time for the economy, and the immediate focus is on restoring macroeconomic stability, there is real ambition within retail and wholesale to help unlock the huge growth opportunities for UK businesses. They know that The right actions now mean we can look forward to a 2023 full of promise, potential and prosperity.”

Mohammad Jamei, Director of Economics at CBIsaid: “The retail and wholesale sector has undergone significant change in the last decade and is on the cusp of digital transformation. It has also been a key sector in delivering to its customers and employees during the difficult times of the last few years.

“Therefore, the sector has much to contribute both in overcoming short-term challenges and in creating future economic opportunities; driving technological advances to anticipate consumer needs and creating transferable digital skills to safeguard the future of employees. and allow its progress.

Helen Dickinson, Executive Director of the British Retail Consortiumsaid: “Retail touches every community every day, providing us with all the products we want and need. As the largest private sector employer in the UK, supporting jobs in every corner of the country, the success of the industry It’s important. We have a world-leading, innovative and resilient retail industry that we can all be proud of, and it needs the right environment to thrive.

“High global commodity costs, a weak pound and a tight labor market are driving up prices for consumers at a time when they already face higher bills and mortgage payments. Unless action is taken, retailers face An additional £800m in commercial fees each year from 2023.

“This is money that is better spent keeping prices low and supporting local communities. The government must encourage investment and protect customers by freezing or limiting this rate increase, and ensure retailers do not pay more than they should.” in rates by reforming the transitional relief system that is not working.

“The government should also reform the apprenticeship levy. Hundreds of thousands of pounds are currently being wasted every month, meaning opportunities for employment, training and career advancement are lost. The industry needs a better-skilled, more productive workforce and better paid, but this “The broken system is holding this back. The government should make the tax more flexible so that retailers can use the funds for high-quality pre-employment courses, short on-the-job development courses, and to cover other costs related to training their people.”

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