UK retailers are being “raided like a piggy financial institution”, the boss of Marks & Spencer has stated, because the sector faces rising taxes.
Writing within the Sunday Occasions, Stuart Machin stated retailers have been going through a collection of headwinds, together with the rise in Nationwide Insurance coverage Contributions (NICs) paid by companies and better packaging levies.
He referred to as for various adjustments from the federal government, together with staggering the NIC adjustments over time.
A Treasury spokesperson stated measures launched in final 12 months’s Finances aimed to ship stability to companies and create the circumstances for development.
Mr Machin stated that most of the Finances bulletins have been “commendable”, such because the deal with long-term planning and makes an attempt to spice up funding in infrastructure.
However he added that if the federal government needed to spice up development shortly, then “lightening the burden that the Finances loaded onto the retail sector” ought to be a precedence.
In October’s Finances, the federal government elevated the speed of Nationwide Insurance coverage (NI) paid by employers from April, and likewise lowered the edge that employers begin paying it at from £9,100 to £5,000. April will even see a rise within the Nationwide Residing Wage.
The federal government has defended its tax rises as essential to keep away from cuts to public providers, and the rise within the minimal wage, with a much bigger increase for youthful staff and apprentices, has been welcomed by commerce unions.
The Treasury has additionally stated that as a consequence of exemptions for smaller companies, greater than half of employers will both see a lower or no change of their Nationwide Insurance coverage payments.
However the adjustments have provoked criticism from companies, and in November final 12 months M&S was one of many signatories to a letter despatched by main retailers to the chancellor asking her to rethink among the measures.
Final 12 months, M&S reported a bounce in annual income to £672m for the 12 months to March. In his article, Mr Machin stated that M&S was “rising, however others usually are not and there’s no doubt that there will probably be fewer jobs, fewer outlets and slower wage development throughout the sector as a complete”.
In addition to adjustments to employment rights and the rise in employers’ NICs, Mr Machin additionally criticised a brand new packaging levy that’s due in October.
The prolonged producer accountability (EPR) measure is designed to make producers pay the complete web prices of managing and recycling packaging waste, and so goals to scale back unsustainable packaging.
In its letter to the chancellor in November, the British Retail Consortium estimated the measure would value the sector £2bn.
Mr Machin stated EPR would “give retailers a tax invoice 20 occasions the present quantity with £2bn going straight to the Treasury as normal taxation and no enchancment to recycling”.
“Retail is being raided like a piggy financial institution and it is unacceptable.”
He referred to as for the federal government to part within the timing of the NICs enhance over two years – echoing a name by Subsequent boss Lord Wolfson – to offer retailers “respiration house”.
Mr Machin additionally stated the EPR charges ought to be delayed and the federal government ought to rethink its strategy to enterprise charges.
A Treasury spokesperson stated: “We delivered a once-in-a-Parliament finances to wipe the slate clear and ship the soundness companies want, laying the foundations for financial development.
“Along with capping company tax at some point of parliament, we’re completely reducing enterprise charges for retail, hospitality and leisure on the excessive avenue from 2026”.
