British Retail Consortium Makes Pre-Budget Submission

by Jason Gorringe, Tax-News.com, London

25 August 2008

The British Retail Consortium (BRC) on Thursday sent a pre-budget submission to Chancellor of the Exchequer, Alistair Darling.

Stephen Robertson, BRC Director General, explained that:

"At this difficult time for retailers and family budgets it's vital that the Government acts to restore economic stability. The BRC is setting out its ‘Six Strategies for Success' - a coherent plan designed to reduce price pressures and restore consumer confidence."

The six strategies proposed by the BRC are:

• Pushing down commercial property costs;
• Encouraging employment;
• Fuelling business efficiency;
• Cutting basic household bills;
• Helping on housing; and
• Meeting the needs of growing children.

With regard to commercial property costs, the BRC urged the Chancellor to ensure that there is no extension of local tax raising powers, such as Business Rate Supplements (BRS), "until the full consequences of these revenue raising measures are properly understood".

It also called for the re-introduction of empty property relief, which was abolished in April, and an urgent review of the tax treatment of unfair lease conditions, where retail tenants have to pay large exit fees when surrendering leases early, but do not qualify for tax relief on these payments.

Commenting meanwhile on cutting basic household bills, the Consortium proposed the urgent introduction of zero VAT ratings for environmentally friendly and energy saving goods, such as low energy light bulbs.

Mr Robertson stated that:

"We fully support the Government's targets on energy efficiency and its determination to reduce VAT on energy efficient products but, to truly make a big environmental impact and influence consumer change, VAT needs to be scrapped on green-friendly and energy-saving goods."

On the topic of meeting growing children's needs, and in conclusion, the BRC suggested that an urgent review of the current zero VAT rating of children's clothing and shoes to ensure it reflects that children today are larger than those of earlier generations, is necessary.

The BRC chief observed that:

"Families are being squeezed by a whole raft of rising costs from increased utility bills to higher petrol prices. As they prepare for the return to school many are also hit by VAT costs they shouldn't have to pay. The zero rating of clothing and footwear for children below the age of 14 must be reformed to account for children being bigger now than they were in the past."

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