It is estimated Tesco will save upwards of £100m over the next five years
Supermarket giant Tesco is in line for a £105m cut in business rates on its biggest stores, while small firms are set to be hit with hikes.
The revelation comes days after the company reported profits of over £1bn and as Communities Secretary Sajid Javid prepares to be questioned by MPs over the controversial tax.
New figures from business rates specialists CVS, seen by the Press Association, show that the Government’s revaluation will see Tesco’s bill for its largest stores in England and Wales fall by £13m this year, from £450m to £437m.
Tesco will save upwards of £100m over the next five years as a result, CVS estimates.
The firm said the figure was “inaccurate”, but declined to say how much their largest stores would save under the reforms.
A spokesman said: “Tesco is one of the UK’s largest rate payers, paying almost £700m in rates in 2016-2017, and the 2017 revaluation will not alter that trend.
“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.”
CVS chief executive Mark Rigby said: “Over the next five years, allowing for transitional relief which limits how quickly bills can rise and fall, with increases through inflation, CVS projects Tesco will save £105.32 million in rates under the revaluation for its largest stores.
“In comparison, across England and Wales small shops have seen their rateable values, used to determine bills, increase by 8.5% whilst pubs have seen a 14.36% hike.”
The figures are based on published government data for property values in 2010 and 2017 and cover 563 of Tesco’s largest stores, classed as superstores, in England and Wales.
Smaller retailers are being hit with massive rises, with some having to absorb increases of well over 50%.
Prime Minister Theresa May has promised there will be “appropriate relief” for those hardest hit.
But the Tesco disclosure is likely to put more pressure on the Government over the 1 April changes to business rates, the commercial equivalent of council tax.
The new rateable values will determine tax bills for the next five years and are based on property valuations as of 1 April 2015.
Mr Javid will face questions on Wednesday over the handling of the revaluation, which has been slammed as unfair and illogical.
[“Source-sky”]
