Supermarket chiefs have told Rachel Reeves a planned business rates hike that will impact large shops is their number one concern ahead of the budget.
Chief executives of a string of supermarkets and other national retailers met the Chancellor at 11 Downing Street on Wednesday to oppose moves to raise business rates for larger properties from 2026.
The reforms were pitched by the government as a way to make online giants pay more of their fair share of the tax, but large shops including thousands of supermarkets are also in the firing line of the higher rate.
The BRC, which orchestrated the meeting, is demanding no shops are taxed more.
“A delegation of leading retailers, led by the BRC, welcomed the chance to meet the Chancellor face-to-face ahead of the autumn budget,” said BRC CEO Helen Dickinson. “It was a constructive meeting and we appreciated her desire to engage and hear the views of retailers on both the challenges and opportunities for growth.
“The industry was clear that its number one priority at the next budget is the government’s upcoming business rates reforms: ensuring that it delivers a meaningful reduction for retail, and that no shop pays more as a result. This will help to relieve the pressure on prices, support local employment, and deliver the growth the government seeks.”
Retail bosses including the chiefs of Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl also wrote to Reeves last month warning the business rates plans threatened to impact ordinary families by fuelling inflation.
Legislation passed earlier this year enables Reeves to use her autumn budget to add up to 10p to the business rates multiplier for larger properties with a rateable value of £500,000 or more. The extra tax collected is to fund a business rates discount for smaller retail, hospitality and leisure premises with rateable value below £500,000.
The higher rate threatens to hit swathes of large supermarkets operated by Tesco, Sainsbury’s, Asda and Morrisons, while the discounters should be less exposed thanks to their smaller stores. Property consultancy Colliers has estimated only 10% of Lidl’s stores will be in scope of the higher tax. In contrast, almost 90% of Asda’s roughly 600 supermarkets are thought to be exposed to the higher rate.
Speaking to The Grocer at a new Lidl store in Paignton in August, the discounter’s chief real estate officer Richard Taylor said: “It’s not just retail stores. Distribution centres will be impacted as well.
“From strategic point of view, anything that’s putting barriers in the way in regard to additional cost of businesses is not ideal.”
No comments yet