More than eight in ten Brits are concerned about rising food prices (83%) and inflation (82%) ahead of today’s Budget, according to new Opinium polling of over 2,000 UK adults commissioned by the British Retail Consortium (BRC).

The BRC said that while retailers are doing everything they can to absorb costs and keep prices as low as possible for customers, the tax burden on the retail industry is making this untenable.

“The message from the public is clear: the cost of living remains a top concern,” said Helen Dickinson, Chief Executive of the BRC.

“Households, retailers and the Government share a common aim of easing pressure on family finances and fixing the youth employment crisis. The Budget must deliver on both.”

“To support this, the Chancellor must address the barrage of costs and taxes currently raining down on the industry. Chief among these are business rates, which are set to rise by another £250million for retailers next April, and employer NICs, which are up by over £2billion in the last two years.”

“Every pound spent on taxes and regulation is a pound not spent on keeping prices low for consumers,” she said.

The retail sector is facing £41 billion in business taxes for 2026/27, a +20% increase in just two years. Compared with other major economic sectors of the economy, retail, along with hospitality, has the highest effective tax rate, with nearly £3 paid in tax for every £4 of profit (72%).

The Chancellor is reportedly preparing to announce changes to the tax system for online marketplaces, making them responsible for collecting tax owed by all retailers selling on their platforms with turnovers of £90,000+, regardless of where they are located.

In a statement, Amazon said it welcomed the prospect, saying: “Closing this loophole will raise significant revenue for the exchequer and simplify compliance for both HMRC and legitimate sellers.”

However, Martin Hamilton, Partner and Head of Retail at Menzies LLP, warned that the £90,000 threshold for VAT collection could cause loopholes. “If the new marketplace collection rules only apply to sellers above the £90,000 VAT registration threshold, there may still be scope for traders to structure their activities to remain outside of them,” he said.

The British Independent Retail Association (Bira) also highlighted concerns that by closing one loophole, the Treasury risks creating new ones.

“The headline is positive, but the devil is in the detail, and we will not see VAT evasion stopped if the carve-outs for the VAT threshold and second-hand products remain in place,” Andrew Goodacre, CEO of Bira, commented.

“The Government has an opportunity to deliver meaningful reform that levels the playing field… But retaining broad exemptions for smaller sellers and second-hand goods risks creating new fraud loopholes that undermine these objectives.”

“We urge Ministers to resist pressure to water down the proposals and ensure the reforms deliver a fairer system for businesses that already play by the rules,” Goodacre added.

Bosses from Tesco, Sainsbury’s, M&S, Costa Coffee and Co-op have lobbied for the Chancellor to cut the cost of employing young people ahead of his first Budget.

In a meeting with the Chancellor earlier this month, they called for a rise in the NIC (National Insurance Contributions) threshold to £6,000, arguing this would help create jobs and ease inflation pressures on high streets.

This would involve a partial reversal of the move by Healey’s predecessor, Rachel Reeves, who lowered the earnings threshold at which employers pay NICs to £5,000 a year.

In an open letter to the Chancellor, M&S’ Stuart Machin said: “I’ve never hidden what I thought of the last two Budgets. They were a disaster. Britain needed a plan for growth and got a pile of new taxes and regulations instead.”

He said that M&S had been left facing £150million of new costs each year, on top of a tax bill of around half a billion pounds, as a result of the last two Budgets.

Addressing the issue of NICs, Machin urged the Chancellor to “undo the most damaging part of the disastrous rise in National Insurance: the cut to the threshold where employers start paying.”

“It hit shops hard, because so many of our jobs are entry-level and part-time, often just a shift or two a week,” he explained. “It also hit our suppliers, particularly in farming and food manufacturing, and strict regulations meant most of those costs ended up with retailers. These pressures were always going to be felt at the till.”

With potential increases in taxes levied banks in today’s Budget, Scott Dawson, CEO of payment processor DECTA, warned of the impact of the UK’s small businesses (SMEs).

“I can see why the Chancellor might be tempted to ask banks to pay more tax. They’re making healthy profits at a time when the Government is struggling to balance the books,” he said.

However, he cautioned that its recent poll of 500 SME ecommerce decision-makers showed 41% expect to raise prices over the next three years.

“That’s a lot of businesses expecting to ask their customers to pay more. Imagine having to do that while also finding your borrowing has become more expensive, or your bank is less interested in lending to you.”

“I’d like to see the Chancellor give some thought to the smaller businesses relying on these services before deciding how much more to tax the banks,” he added. “And I’d like to see more competition from challenger lenders and payment providers, because there are plenty of businesses out there who could do with better options than they’ve currently got.”