Andy Burnham's high street tax raid could cost £880m a year as Britons 'to be asked to contribute more'

Economists claim the likely next Prime Minister Andy Burnham's proposal to reform business tax rates could cost the country £880million a year.

The Downing Street hopeful, formerly Manchester's mayor, plans to offset these costs by imposing steeper property levies on major warehouse facilities operated by e-commerce behemoths such as Amazon.

During a recent LBC appearance, Mr Burnham suggested Labour's manifesto allows "room for movement on tax" while pledging adherence to the party's fiscal framework.

The proposals emerged initially during his successful Makerfield by-election campaign and aim to redirect resources from digital retail giants toward struggling independent businesses.

Global tax specialists Ryan forecast that more than 140,000 small premises across England would be lifted entirely out of business rates under the proposed changes.

Their calculations, drawing on Government tax data, indicate the relief measures would slash business rates liabilities by approximately £880million.

Central to the plan is a substantial expansion of eligibility thresholds for small business rates relief. Properties would qualify for complete exemption if their rateable value sits at or below £18,000, up from the current £12,000 ceiling.

The upper limit for tapered relief would similarly rise, climbing from £15,000 to £21,000, extending partial support to a broader range of enterprises.

Alex Probyn, a practice leader for property tax at Ryan, acknowledged the merits of the approach while raising questions about its financial sustainability.

He said: "Supporting small businesses is a great policy objective. The concern is how that is funded if things have to be revenue neutral."

Mr Probyn noted that larger commercial properties already shoulder greater contributions through the existing business rates surtax, which helps reduce liabilities for retail, hospitality and leisure establishments.

The tax specialist cited that "the obvious question is whether they are now going to be asked to contribute even more," highlighting uncertainty around how the shortfall would ultimately be covered.

Mr Burnham secured victory in the Makerfield by-election last month, a contest during which he championed the cause of making "online giants" pay more through increased warehouse taxation to bolster smaller enterprises and revitalise Britain's high streets.

Following his keynote address, he told LBC that elevated business rates on major out-of-town developments could potentially fund reduced levies for pubs whilst removing certain small businesses from the system entirely.

The Government's April reforms already introduced a 2.8 per cent surtax on properties valued above £500,000 in England.

Nevertheless, numerous small businesses in retail, hospitality and leisure face substantial tax increases over the coming three years.