Retailers suffer from stealth tax

The UK government’s Spending Review sparked anger among retailers last week as the chancellor imposed a £1 billion stealth tax on environmental initiatives.

The Review outlined that businesses which participate in the Carbon Reduction Commitment energy efficiency scheme will not see the benefits paid back to them, but will see them go straight into the government’s coffers instead.

Given retailers use a lot of property, they will be particularly hard hit by the government’s scheme.

British Retail Consortium director General Stephen Robertson said of the decision: “We are surprised and dismayed that the £1bn per year participating businesses will put in to the Carbon Reduction Commitment scheme is no longer to be recycled to participants but is instead to be pocketed by the exchequer.

"Retailers will be particularly hard hit, despite having led the way in tackling climate change.

“This is a stealth tax on business which not only goes back on the commitments given in developing the scheme but removes a major source of incentives to reduce carbon emissions.

“It’s appalling the government is sneaking this in, introducing a new burden on businesses that are trying to create new jobs to offset the public sector cutbacks and growing the economy to generate the tax base to pay down the debt.”

The CRC Energy Efficient scheme has been amended so that the first allowance sales for 2011-2012 emissions will take place in 2012 instead of 2011.

Revenues from allowance sales totalling £1bn a year by 2014-15 will now be used to support the public finances rather than recycled to participants.

Jane Parkinson, 25.10.2010