The proposal has caused quite a stir, but it comes as more than 20 businesses have announced closures or entered administration this year.
Mr Burnham’s plan is set to cost millions (Image: Getty)
Andy Burnham has revealed a bombshell tax plan to save Britain’s dying high streets. The former Manchester mayor, now prime minister-in-waiting, aims to overhaul business rates by increasing property taxes on large warehouses. Such a hike would impact online giants like Amazon, which use warehouses to store produce.
Mr Burnham’s high street tax plan could see the threshold for total small business rates relief in England raised by 50%, a move intended to exempt more than 140,000 small commercial properties from business rates altogether. The upper threshold for tapered relief would also rise from £15,000 to £21,000 under the plan. Speaking on LBC earlier this week, Mr Burnham said there is “room for movement on tax” within Labour’s manifesto, whilst maintaining his commitment to the party’s fiscal rules. However, a new analysis estimates Burnham’s proposal could cost a staggering £880m a year.
The British high street has been deteriorating over the years (Image: Getty)
Projections from global tax specialists Ryan, based on government tax records, indicate that the suggested adjustments would decrease business rate obligations by approximately £880m.
Alex Probyn, practice leader for property tax at Ryan, said supporting small businesses was a “great policy objective”, but raised questions over how the measure would be funded if it had to remain revenue neutral.
He said: “Larger commercial properties are already contributing more through the existing business rates surtax to fund lower liabilities for retail, hospitality and leisure.
“The obvious question is whether they are now going to be asked to contribute even more.”
Mr Burnham says there is ‘room for movement on tax’ (Image: Getty)
While business rates reforms enacted this April implemented a 2.8p surcharge on British properties with rateable values exceeding £500,000, the debate over further changes continues.
Mr Burnham has championed the argument that online giants must provide greater financial support to help sustain bricks-and-mortar retailers and rejuvenate Britain’s high streets.
Despite existing measures, a significant number of smaller hospitality, retail, and leisure businesses are still braced for substantial hikes in their rate bills throughout the coming three-year period.
It comes after the Daily Express revealed a full list of major brands closing branches on the British high street. Due to a combination of rising costs and less consumer demand, a whopping 22 businesses have announced closures and administrations so far this year.
These include River Island, Poundland, and Quiz. Bosses say rising operational and employment costs have significantly impacted the situation.
