// Chancellor urged to use £2bn business rates relief paid by essential retailers to help embattled shops
// Retail groups called for reforms plus a 12-month extension of the business rates holiday for struggling non-essential retailers
Chancellor Rishi Sunak has been urged to use the almost £2 billion worth of business rates relief paid back by essential retailers to help shops battered by the Covid-19 pandemic.
According to The Telegraph, the BRC, British Independent Retailers Association (Bira) and The Federation of Small Businesses (FSB) have called for reforms to business rates as well as a 12-month extension of the business rates holiday for struggling non-essential retailers – particularly small and independent retailers.
It comes after German discounters Aldi and Lidl, and Big 4 grocers Tesco, Sainsbury’s, Morrisons and Asda, all announced this week that they would hand back a combined total of almost £2 billion in business rates relief to the UK Government.
- Amazon-owned Whole Foods joins grocery giants in repaying business rates relief
- Lidl joins Aldi & Big 4 in handing over savings from business rates relief
- Pets at Home and B&M follow Big 4 & Aldi to hand over business rates relief
Most recently, Amazon said it would hand over £2 million worth of business rates relief from its seven-strong chain of Whole Foods stores located in London and Surrey.
Two other retailers that have been allowed to stay open through lockdown as they were classed as “essential”, Pets at Home and B&M, have also announced they would hand over their savings from the business rates relief.
The one-year business rates holiday was announced in March by Sunak, aimed at helping retailers and hospitality firms forced to close their high street premises due to the Covid-19 pandemic.
“This money should be used wisely by the government by using it to extend the existing rates holiday for a further 12 months for the smaller independent retailers,” Bira chief executive Andrew Goodacre told The Telegraph.
“This would cost £1.5 billion. The remainder should be used to create new skills and new jobs.”
BRC business and regulation director Tom Ironside said: “At a time several major retailers have fallen by the wayside putting tens of thousands of jobs at risk, the government must act to relieve the business rates burden.”
The Chancellor is also facing renewed pressure to reform the business rates regime before it comes back into effect in the next tax year starting April 2021.
The Treasury has launched a review of business rates, although the outcome of it will not be known until next spring.
“We have asked the government to look at the next wave of bills in April, and into the medium-term, to finally sort this out,” FSB chief of external affairs Craig Beaumont told The Telegraph.
“Business rates are a massive upfront cost, damaging high streets and disincentivising business creation in our communities.”
Last month Altus Group projected the UK’s Big 4 grocers and their German rivals would save combined total of about £1.87 billion as a result of the one-year business rates holiday.
Altus Group added that the total saving for all “essential” retailers is about £3.03 billion, from a total business rates bill of £10.1 billion.
B&M has called on the government to create a level playing field that requires all “essential” and online retailers to contribute proportionately in terms of taxation and business rates.
Meanwhile Tesco previously urged the government to impose a two per cent online sales tax to help pay for a cut in business rates for shops, saying the current system is unfair and was damaging communities across the country.