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Retailers' tax burden rockets 65% since 2005

Retailers are paying more taxes and business rates than ever before, a report by PricewaterhouseCoopers has found.

The total tax burden shouldered by retailers in The Hundred Group – mainly FTSE100 companies - has increased by 65% since 2005. Corporation tax has grown by 11%, meaning other taxes including business rates and national insurance have risen by nearly 80%.

Between 2008 and 2010 alone business rates have climbed by 30% while corporation tax rose 6%.

Major retailers now face a total tax rate – in relation to profits – of 59%. This compares with 39% for companies across other industries.

The retailers in The Hundred Group paid £3.99bn tax in 2012, up from £3.86bn in 2011. Adding the taxes these companies collect such as PAYE, net VAT and employees’ national insurance contributions, the full tax contribution totals £8.28bn, up from £8.17bn in 2011.

PwC said: “In a changing tax system, which is moving from direct to indirect taxes, the impact on the retail sector is significant.”

Christine Cross, chief retail adviser to PwC, added: “Retail in the UK not only gives domestic employment, but also stimulates consumer confidence and makes a significant contribution to the public purse. However, high business rates represent a significant burden for those still trying to balance physical stores with online retail.”

Drapers’ sister publication Retail Week is currently running a campaign for Fair Rates for Retail.

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