The UK government has proposed a rise in business tax on all properties valued at over £500,000, or around €585,000. The move has sparked a dramatic backlash in the UK retail sector, with the British Retail Consortium (BRC) warning that as many as 400 of the largest stores - from supermarkets to department stores - could face closure if the proposal goes through.
The government's stated aim is to permanently fund tax breaks for smaller businesses in the retail and hospitality sectors. This would turn temporary rebates, introduced to help smaller businesses, into permanent support.
But the sector is already feeling the brunt. The BRC says: "Given the low profits that exist in retail, a significant increase in tax on large stores would force them to raise prices, cut staff or, in the worst case, close their doors altogether."
They note that retailers are already facing increases in social security contributions, a minimum wage hike and a new tax on packaging. The industry's total annual costs have risen by around £7 billion.
Reuters reports an analysis that the closure of all 400 affected stores would lead to the loss of up to 100,000 jobs. In addition, local authorities would lose more than £100 million in annual tax revenue, which would further strain budgets.
Chancellor of the Exchequer Rachel Reeves is due to present details of the tax reform plan in her budget statement on 26 November. Analysts predict that in order to meet fiscal rules and reassure investors, the minister may have to announce tax increases or spending cuts of more than £20 billion.
The fate of the British retail sector is now uncertain. The government is trying to balance support for small businesses with maintaining fiscal stability. And while decisions are awaited at the end of November, hundreds of large stores and thousands of their employees are literally hanging by a thread, and the future of the sector depends on each of these decisions.