Retailers are preparing for a fightback against the proposed stamp duty on leases, which Chancellor Gordon Brown announced in his budget speech last month.
Richard White, incoming president of the Property Managers' Association, which represents 130 of the UK's biggest retailers, said that his in-tray had been inundated by angry retailers since the Chancellor dropped his bombshell.
'This is the biggest topic we've seen in recent years,' said White, who is UK property director at Thomas Cook. 'Another occupancy cost when we can least afford it is like kicking a dog when it's down.'
And he accused the Treasury of acting unilaterally without consulting on the issue first. 'The PMA is represented on the Office of the Deputy Prime Minister's committee, and it certainly wasn't discussed there,' he said. 'We want to see this tax reversed, or at least revised.'
Under the proposals, retailers taking a new lease will pay tax at 1 per cent of the net present value of all the rental payments due under the lease. So, the longer the lease the higher the tax. White said this would hit retailers hard. 'While office and industrial lease lengths have fallen, retailers still need a long enough lease to allow them to write off their fit-out costs.'
But the window for effective lobbying is short: Cathryn Vanderspar, partner at solicitors Berwin Leighton Paisner, warned: 'The proposals are not yet in final form and are not proposed to come in until December 1 at the earliest and are still open to consultation and to change. However, it appears that it is anticipated that they will come into effect as proposed unless appropriate arguments are made otherwise.'
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