The boss of Currys, the UK’s biggest electrical goods retailer, has urged the government not to increases taxes on retailers this year, saying it would damage investment and force prices to rise.
Alex Baldock, the retailer’s chief executive, said: “We urge government not to make a further contribution to the tax burden as that would further dampen investment and increase prices in an inflationary way.
“I would urge government to think very carefully before making the situation worse.”
Baldock’s comments come after the boss of Sainsbury’s, Simon Roberts, also said this week that the government should be wary of loading retailers with more tax after the “high impact”, particularly on jobs, of raising national insurance costs this year.
The chancellor, Rachel Reeves, is widely expected to raise fresh funds in her autumn budget as she attempts to fix public services and grow the economy while meeting her fiscal rules and dealing with the fallout from the government’s U-turn on welfare cuts.
Keir Starmer repeated his support for Reeves on Thursday morning, after speculation over her future injected panic into financial markets on Wednesday.
Baldock said Currys – which has about 300 stores in the UK – and other retailers were already holding back on hiring more staff because of an increase in employers’ national insurance contributions and the rise in the “national living wage” in April. He said consumer confidence was on an improving trend but still down on a year ago.
Despite this, the retailer reported a 37% jump in pre-tax profits to £162m in the year to 3 May and resumed dividend payments to shareholders after a two-year pause. Group sales rose 3% to £8.7bn.
Currys increased sales at established UK stores by 6%, helped by a 12% rise in sales of services including repairs, financing and mobile subscriptions.
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Sales of laptops and mobile phones were bolstered by demand for AI-enabled gadgets. Sales were also helped as customers began replacing laptops bought five years ago when the onset of the Covid pandemic forced Britons to begin working from home, triggering a boom in computer sales.
Baldock said the wider electrical goods market had been flat in the UK and there were concerns about cheap electricals being dumped on online marketplaces amid new taxes on imports of such goods to the US and planned changes in the EU.
Baldock said that dumping did not directly affect Currys, which mostly sells larger, more expensive items, but he welcomed the government’s promise that it would look at the so-called de minimis rules, which allow tax breaks on low value goods sent directly to consumers. He said changes should be made with “some urgency”.
In the UK, the threshold for import duty is £135, and items valued at £39 or less also do not attract import VAT.