Reduction in personal tax burdens welcome, but business rates remain the elephant in the room

“The decision to reduce the personal tax burden offers some positive news for the retail sector, at a time when consumer confidence is low and households are reining in spending on the high street. Whilst the reduction in national insurance contributions will help put more money in the pockets of some households, it will do little to help the burden on lower income families or reduce the high food inflation levels that they are facing, and I would expect consumers to still remain cautious around non-essential spending in the medium term.

“Labour costs and a shortage in workers remains a big challenge for the retail sector, and whilst most larger supermarkets are already paying around the new living and minimum wage rates announced today in order to get the best people into roles, it is an additional cost burden facing smaller, independent retailers at a time when consumer demand is softening.

“What retailers would have liked to have seen is some final decision on the reform of business rates – a key issue that has been kicked down the road for too long.  Smaller and independent retailers were thrown a lifeline with the extension of the 75% business rates discount for a further year, but the uncertainty around one of their biggest costs as they navigate challenging economic times would have been much welcomed today and is an issue that can’t be put off for much longer.”

-ENDS-

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KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022.  

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.