HEALEY FACES RETAIL PRESSURE AHEAD OF OCTOBER BUDGET

Retail executives were due to warn Chancellor John Healey at a Downing Street summit that further tax rises on shops would push up prices and cut jobs, two weeks before his first Budget on 28 October. Figures from Tesco, Sainsbury's, Amazon, Co-op and Marks & Spencer were among those expected at the pre-Budget meeting, according to reports. British Retail Consortium chief executive Helen Dickinson wrote ahead of the summit that shops "cannot afford more bad decisions", warning that retailers cannot absorb further costs without passing them on to shoppers. She said retail employment was at its lowest recorded level and warned that job losses reduce opportunities, local spending and growth. Separate reporting said the Treasury is preparing a measure requiring online marketplaces such as Amazon, eBay and Temu to collect VAT owed by sellers earning more than £90,000 a year, intended to fund business rates cuts for high street shops.

Labour has introduced several tax changes since taking office in 2024, including a £25billion increase in employers' National Insurance contributions, which has been linked to falls in retail, wholesale and hospitality employment, according to reporting. The Institute for Fiscal Studies said in its Green Budget that the Chancellor will need to find £35billion in tax rises or spending cuts to meet the Government's commitments. John Lewis and Waitrose chairman Jason Tarry had warned that a proposed tax on warehouses would trigger a wave of closures and harm high streets, with one report saying he described it as misunderstanding how modern high streets operate. Reports said the policy, previously linked to Andy Burnham, had been intended to fund the Prime Minister's pledge to exclude 140,000 small high street retailers from business rates.

Healey has ruled out an increase in business rates on warehouses, according to reports. Tax Policy Associates founder Dan Neidle said the proposed VAT measure on online marketplaces was "a step in the right direction" but that the Treasury needed to go further, warning that foreign-owned shell companies would otherwise continue avoiding VAT. He said Healey would face pressure to lower the £90,000 threshold. The Budget on 28 October is expected to confirm the Government's final decisions on both the online marketplace tax and business rates for high street retailers.