Rates drive up retail burde

The UK’s biggest retailers have seen their total tax burden increase by two thirds over the past seven years, reaching nearly £8.3bn last year, according to research by PwC say Harris & Co accountancy services.

The firm’s analysis of the amount of tax paid by retailers in the Hundred Group of companies, which includes most of the FTSE 100 and some large private companies, shows it has gone up by 65% since 2005.

PwC says the total tax rate for big retailers is 59%, compared with an average of 39% across all industries in the group. It calculates that retailers are paying 11% more in corporation tax, while other business taxes, including business rates, and employers’ NICs have risen almost 80%.

PwC found that for every £1 of corporation tax, the UK’s biggest retailers bore almost £2.40 in other taxes, of which £1.44 related to business rates, and 64p related to employers’ national insurance contributions.

Mary Monfries, head of tax policy at PwC, said: ‘The rise in business rates in particular is felt by retailers given their large property portfolios.’

In total, PwC calculated that the big retailers bore £3.99bn of tax in 2012, up from £3.86bn in 2011. When VAT and employees’ NICs are added in, their full tax contribution was £8.28bn, up from £8.17bn in 2011.