// The EU prevented tax relief on 435 Thomas Cook shops in England before its collapse, says Altus Group
// UK government tax policy had already denied Thomas Cook’s English shops a £2.5m stimulus
The EU prevented tax relief on 435 English Thomas Cook shops before its collapse, a leading real estate advisory firm has suggested.
Despite former Chancellor Philip Hammond claiming he would cut business rates by a third for all high street firms in England with a rateable value below £51,000 from April this year, it has emerged that Thomas Cook was only entitled to the tax relief on less than 2.5 per cent of its retail shops due to strict EU rules.
According to Altus Group, the collapse tour operator had 446 shops in England that were liable for business rates with a rateable value less than £51,000.
This meant they were eligible, in principle, to the former Chancellor’s £900 million two-year tax stimulus.
- Thomas Cook’s stores denied £2.5m tax stimulus before collapse
- 600 Thomas Cook high street stores shut down amid company collapse
However, EU rules restrict State aid to €200,000 per business over a three year period.
This in turn means large retailers are only entitled to claim tax relief up to around £88,900 for each year of the retail discount – enough to fund the relief on just 11 Thomas Cook shops.
“Thomas Cook, like most large retail and hospitality chains, would have reached the de minimis regulation limit pretty quickly one way or another and were precluded,” Altus Group head of business rates Robert Hayton said.
“Around a third of all small properties are completely exempt from business rates whilst 90 per cent of independent retailers are entitled to the cut but nothing has been done to help the major employers ease the burden despite the structural changes taking place.”
Separate data from Altus Group earlier this week revealed that Thomas Cook’s high street shops in England were “denied” a £2.5 million tax cut due to government policy around business rates.
The firm said Thomas Cook should have been a “big winner” under the 2017 business rates revaluation – but in order for the government to help pay for relief to phase in increases for those businesses facing sharp rises in business rates, strict punitive limits were imposed on stores in struggling areas where property values and rents plummeted.
Last month, around 600 of Thomas Cook’s high street stores shut down after the travel company collapsed following an unsuccessful rescue bid.