Danny McCance 16 Jan 2019 04:16pm

M&S boss blames business rates for closures

Business rates are “an unfair burden of taxation,” according to Steve Rowe, chief executive of UK retailer Marks & Spencer

His comments, alongside the Marks & Spencer’s (M&S’) Q3 results, coincided with the chain’s announcement of 17 new store closures across the UK, impacting 1,045 employees.

The company has so far closed 30 stores but plans to shut more than 100 as part of a major restructuring.

“[Business rates] directly contribute to the challenges the high street is facing, combined with other tax effects that retailers are seeing,” Rowe added.

“Partly, our store‑closure programme can be attributed to business rates. Our Covent Garden store, for example, faced a business rate rise of close to £500,000 [annually],” he said.

“In the nicest possible way, we sell sandwiches,” Rowe said. “We need to make sure in the future that we have an appropriate and fair taxation system. It is not about us per se paying less tax; it is about a level playing‑field,” he added.

Its Q3 UK revenue was down 2.2% like-for-like on the same period last year.

Rowe described performance as steady in what he acknowledged was difficult market conditions, adding that the M&S transformation project remains “on track”.

In July, research found that nearly 200,000 companies were brought before Magistrate Court for failing to pay their business rate bills, after business rates rose an extra £847m (3.5%) to £24.3bn in April.