The retail industry is overtaxed compared to other sectors of the UK economy, according to new research from the British Retail Consortium (BRC.)

The trade association said that retail pays 7.4 per cent of all business taxes – £33 billion – a share 1.5 times greater than its share of the overall economy, which is five per cent GDP.

The organisation claims that this bill amounts to 55 per cent of the industry’s pre-tax profits, the highest proportion, along with hospitality, of all main business sectors.

It says that of this total tax bill, 11 per cent of profits is made up of business rates, the highest of all business sectors.

“Our research conclusively proves what retailers have known for years: the industry is paying far more than its fair share of tax,” said Helen Dickinson, chief executive, BRC. “The impact of this is clear to see on High Streets across the country, with shops shut, jobs lost and a social as well as economic cost.”

Dickinson explained that the rates bill has led to the industry missing opportunities as other investments, which would drive growth in the longer term, don’t happen.

The chief executive went on to say that the chancellor has a "golden opportunity" to fix these rates by introducing a 20 per cent Retail Rates Corrector to "level the playing field" between different sectors.

Labour's election manifesto acknowledged issues with current business rates, suggesting that the system "disincentivises investment" creates uncertainty, and places an "undue burden" on High Streets.

BRC figures show that the UK has lost 6,000 shops in the last five years, with two-thirds of these closures in part driven by concerns over business rates.

The trade association says that without action, up to 17,300 shops could close over the next decade.

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