Business leaders back bid to slash retail tax

Monday 03 December 2018

Four major groups representing retailers, local businesses and consumers have come together to back proposals to reduce the new 20% retail tax by half in the 2019 Budget.

In an unprecedented show of support, the Jersey Chamber of Commerce, the Jersey Retail Association, Jersey’s Consumer Council and the Town Centre Manager are rallying behind Constable Simon Crowcroft, who is proposing that the retail tax is brought down to 10%.

The divisive retail tax, which was introduced as part of last year’s Budget, levies a 20% charge on the island’s largest retailers – except the Co-op, which doesn’t have to pay it due to being partly-owned by its customers.

In a report outlining his proposal, Constable Crowcroft said the amendment “seek[s] to mitigate the damage” he thinks the 20% tax is wreaking on Jersey’s retail sector.

Pictured: St. Helier Constable Simon Crowcroft is bringing a bid to slash retail tax in half.

"...The harmful nature of the new tax does not stop there as it will have, if it has not had already, before its first receipts are collected, adverse impacts on the well-being of the least well-off in Jersey, on our visitor economy, and on the vitality of our town and village shopping centre," the Constable explained.

Constable Crowcroft expressed a desire to abolish the tax altogether until the States introduce a Retail Strategy, but said that businesses and retailers would be happy “to bear the new retail tax were it to be limited to 10%."

In a mass show of support, four major players in the retail industry in Jersey have come together to echo the politicians sentiment ahead of a meeting with States Members tomorrow to elaborate on their position regarding the tax.

Chamber of Commerce President Eliot Lincoln said that the retail tax is proving a disincentive for big businesses to invest in Jersey: “Retail is currently maintaining a unique offering, when compared to the rapidly changing High Street of the UK. 

“But this offering is under threat from changing shopping habits toward online purchases, the cost of operating a ‘bricks and mortar’ business and the diminishing attractiveness for larger new entrants to Jersey to invest on island with an excessive retail tax in place.”

Pictured: Chamber of Commerce President Eliot Lincoln said that the 20% retail tax is dissuading businesses from investing in Jersey.

Mr Lincoln argues that the reduced rate of 10% would be a “sensible compromise that ensures a tax is levied but will also provide the necessary stimulus toward investment into the sector, entice further brands to Jersey and enable an improved shopping experience.” 

Commenting on the impact of the retail tax on the industry, Chief Executive of the Jersey Retail Association Lorie Rault said: “Retail is the third biggest employer on the Island and accounts for half of the Island’s total GST receipts." 

“The decision to implement a retail tax (which is double that of the finance industry) at a time when the industry desperately needs support and resources to survive is damaging and short- sighted.” 

Consumer Council Chairman Carl Walker agreed, adding: “Life continues to get more and more expensive for every day Islanders so anything which has the chance to bring down prices – or at the very least prevent them from going up any further for the time being – has to be welcomed.”

Pictured: Key retail players have united to protect their industry from the retail tax by supporting the Constable's proposal to cut it in half.

Meanwhile, Town Centre Manager Daphne East said that the amount of vacant properties in St. Helier should be a “warning sign” that the retail sector needs supporting: “St Helier has weathered the recession well in comparison to other UK towns and cities. However we have seen over £1m in rental property vacant for over 12 months and this has increased our average vacancy rates from 1.5% to 2.9% at its highest peak.

“This needs to be a warning sign for the future of our town centre. St Helier tends to track a few years behind the UK so potentially we may not feel the full impact of high vacancy rates until 2020. A retail tax that is higher than that of the UK is ludicrous and shows a complete lack of insight into the current and future of our town centre retail offering.” 

The proposals come following a series of Scrutiny hearings before a panel of politicians tasked with reviewing the island's retail policy in which Sandpiper boss Tony O'Neill, Estate Agent Simon Buckley and the Town Centre Manager spoke of the current struggles for the high street.

The 2019 Budget will be debated and voted on in the States throughout this week, including Constable Crowcroft’s amendment.