Yahoo Finance Supermarket giants attack 'medieval' rates system
The heads of two of the UK’s biggest supermarkets have called the business rates system “medieval” and accused the Government of laziness in tackling reform.
The system has come under fresh attack in the run-up to the first rates revaluation in eight years in April, which will mean retailers will have to find an estimated extra £2.25bn over the next five years.
Retailers are warning that the property tax will threaten smaller businesses and stall investment.
Andy Higginson, chairman of Morrisons, told The Sunday Telegraph that he believed business rates were “a medieval tax that have past its sell by date.”
Mike Coupe, chief executive at J Sainsbury, argued that the system “is flawed and need to be replaced with one more relevant to the world we live in.” Mr Coupe said Sainsbury’s rates bill was far higher than its corporation tax bill and close to equalling its entire profits.
“Business rates reduce the incentive to invest… areas which need investment will continue to be marginalised,” he said, pointing to the example of supermarkets investing in convenience shops in the south east rather than opening more superstores in the north.
Mr Higginson said the problem the industry faced in getting reform “is that it is a very easy tax to collect and so lazy governments, rather than face up to the need to reform, will always take the path of least resistance.”
The grocers’ outrage comes despite analysis from business rates consultants at CVS showing that the largest superstores will enjoy a £39.9m reduction in their rates bills over the next five years.
