// Grocers to benefit from a £550 million tax cut following the shake-up of the business rates system
// Supermarkets will see the rateable value of their property drop 10% next April
Supermarkets are set to benefit from a £550 million tax cut over the next three years following the shake-up of the business rates system that comes into force this April.
Grocers will see a 10% reduction in the rateable value of their property when they are revalued based on 2021 values, City AM reports.
Analysis from Altus Group revealed that larger supermarket stores will see their rateable values drop from £2.86 billion to £2.43 billion next year and will save around £218.6 million, which could rise to £686.78 million across the three-year period.
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However, smaller supermarkets and convenience shops will see an increase to their valuations.
This will increase the tax burden of these stores, which include many Aldi and Lidl shops, by around £140.76 million over the next three years.
It means that grocery retailers as a while will see their bills fall £546 million over the next three years across all types of shop.
The shake-up to the business rates system comes after criticism from retailers that previous values were outdated.
Atlus UK president Robert Hayton said the overhaul was a “market correction within the sector”.
“The biggest surprise is the modest reduction overall for over 400,000 ordinary shops which is difficult to square with the collapse in demand for new leases around the valuation date and the immediate aftermath of pandemic restrictions,” he said.
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