Backlash grows over failure on enterprise charges as Kingfisher reveals £31m Budget hit

The boss of B&Q owner Kingfisher last night joined the chorus of retailers calling for an ‘urgent’ overhaul of business rates to help offset the pain inflicted on corporate Britain in the Budget.

As Rachel Reeves sought to defend her tax and spending plans at the CBI conference, Thierry Garnier said radical reform to the hated rates system was ‘even more vital’ given the extra costs facing the High Street.

Retailers took at £7billion hit in the Budget as the Chancellor breached the Labour manifesto to raise National Insurance and approved an inflation-busting increase in the minimum wage.

In a further costly setback to the industry, she left the High Street facing a £140million increase in business rates bills and put off any meaningful reform of the system until 2026.

The British Retail Consortium estimates that 17,300 shops could close over the next decade unless the rates regime is overhauled.

The issue has been highlighted by the Mail’s Save Our High Streets campaign.

Kingfisher boss Thierry Garnier (pictured) said radical reform to the hated rates system was ‘even more vital’ given the extra costs facing the High Street

Garnier revealed Kingfisher –which owns Screwfix as well as B&Q and is a member of the FTSE 100 index of Britain’s leading companies – will take a £31million hit next year from the National Insurance hike alone.

The company also faces £14million of extra taxes in France, where it owns Castorama.

Kingfisher shares tumbled 13.3 per cent, leaving it valued at £5.35billion, as the extra costs and sluggish sales led it to downgrade profit expectations for the year to between £510million and £540million, having previously targeted up to £550million.

‘With all the additional costs facing the retail sector, it’s even more vital and urgent that we see fundamental business rates reform to reduce the unfair burden on all retailers with stores,’ Garnier told the Mail.

Business rates are a local levy based on the value of a commercial property, meaning shops pay a premium compared to online giants such as Amazon.

Household names from Marks & Spencer to Currys have railed against this, calling it unfit for purpose and at odds with the modern age.

Labour promised to ‘replace the business rates system’ in its manifesto to ‘level the playing field between the High Street and online giants’.

But instead of taking radical action in the Budget, Reeves slashed Covid-era rates relief from 75 per cent to 40 per cent and imposed a cap of £110,000.

Launching a ‘conversation’ about what a fairer system would look like, she proposed lower bills for smaller buildings, but not until 2026, to be paid for by higher bills on more valuable properties.

Garnier said this ‘will simply penalise retailers with larger stores and further hold back investment, growth and job creation right across the country’.

His concerns were echoed by Gavin Peck, chief executive of High Street stationery chain The Works, who said: ‘We have repeatedly called for rates to be overhauled given the system is an unbalanced method of raising taxes and is completely out of touch with property values.’

He said he hopes ‘meaningful change is implemented’ but added that until then, he faces increases to National Insurance and the minimum wage as well as a higher business rates bill.

In her first Budget as Chancellor last month, Reeves announced £40billion of tax hikes, including a £25billion National Insurance raid on employers.

‘There is no doubting the extent to which business has been milked in the last Budget,’ said the CBI’s chairman, Rupert Soames.