Tax and labour law proposals could be the final nail in the coffin for the high street
The government’s tax and labour law proposals could be the ‘final nail in the coffin’ of the British High Street, say leading audit, tax and business advisory firm, Blick Rothenberg.
Robert Salter, a director at the firm, said: “The British High Street has been under pressure for the last 20 years due to out-of-town shopping centres and online retail giants such as Amazon.”
“But the higher rates of employer National Insurance Contributions (NICs), and the 6.7% increase in the National Minimum Wage coming in April, along with the planned introduction of ‘day one’ protection for workers could be ‘the straw that broke the camel’s back’ for the British High Street.”
He added: “Although it is difficult in principle to argue against the significant increase in the National Minimum Wage for our lowest paid workers, this decision has real implications for employers, who are already struggling in the current economic climate.”
Robert said: “These extra burdens for retailers already come on top of a cost-of-living squeeze on the general public, which has been going on for a number of years already and which looks likely to continue for the foreseeable future. It is compounded by the fact that the personal tax allowance and tax rate bands haven’t increased since 2022 and aren’t scheduled to be increased until at least April 2028.”
He added: “With the pressures that High Street retailers are under, it is no surprise that WHSmith is considering closing all of its High Street stores, although outlets in train stations and airports would remain. The owners of Lakeland, a kitchenware store, are currently trying to sell the businesses due to financial pressures brought about by Labour’s proposed changes.”
Robert said: “But these issues do not just impact larger chain stores, virtually every retailer on the High Street is facing these pressures, including locally run independent shops that are a big part of a town centres appeal and character.”
He added: “Town planners and politicians talk about re-invigorating our town centres and making them destinations for people to go to, but this will be very difficult to realize with the cost-of-living crisis, employer’s NICs and National Minimum Wage increases.”