13 Days Remaining

Tuesday 18th
posted by Morning Star in Britain

Small shops and pubs will have to pay more

TESCO is expected to benefit from a £105 million cut in the business rates on its superstores over the next five years, while small firms and pubs face extinction in the face of crippling increases.

This comes just days after the supermarket chain reported profits of more than £1 billion.

Communities Secretary Sajid Javid faces a grilling by MPs tomorrow over the controversial changes to the commercial equivalent of council tax that came into force earlier this month.

Causing further embarrassment to Prime Minister Theresa May, firms linked to Chancellor Philip Hammond and his predecessor George Osborne — both millionaires — are to receive hefty business rates discounts.

Tesco’s bill for its largest stores in England and Wales is set to go down by £13m this year alone, from £450m to £437m, according to new figures from business rates specialists CVS.

The revaluation of the rates on its superstores will save the company £105.32m over the next five years, CVS added after analysing government property-value data for 563 of the largest Tesco branches.

The supermarket chain’s rateable value has dropped by 8.6 per cent compared to 2010, following a “writedown” of its property portfolio.

Meanwhile, small-shop owners will see their rateable values, which are used to determine the tax bills, increase by 8.5 per cent, while pub landlords will see theirs rise by 14.36 per cent, CVS chief executive Mark Rigby said.

Some retailers across the country — especially in central London and the south-east — will see their business rates rise by more than 50 per cent.

Tesco disputes the £105m tax cut figure as “inaccurate,” but the company declined to reveal how much its largest stores would save under the revaluation.

A Tesco spokesman said that the chain paid almost £700m in rates for 2016-17.

He added: “Tesco has a significant physical presence across high streets and town centres, and fixed costs such as business rates are placing huge pressure on our operations.

“The current rates system is unsustainable and needs urgent reform.”

New rateable values, which came into force on April 1, will determine tax bills for the next five years and are based upon property valuations as of April 1 2015.