Address

Precise Investors

Saturday, October 23, 2021
Latest News

UK supermarkets to forgo UK property tax relief

UK supermarkets

The British government exempted all retailers from paying the tax on their stores to help them through the Covid crisis

Sainsbury’s, Asda, Aldi and B&M will forgo UK property tax relief during the pandemic, following rivals Tesco and Morrisons and taking the total recouped by the UK government from retailers to £1.8 billion.

Britain’s supermarket groups have seen sales soar during the pandemic, but have been criticised by politicians for paying shareholder dividends while receiving tax relief.

Sainsbury’s said it would now pay £440m of so-called business rates, while Walmart owned Asda will pay £340m and German-owned Aldi will pay £100m.

Discounter B&M later said it would forego business rates relief worth around £80m in its current financial year.

The British government and devolved administrations in March exempted all retailers from paying the tax on their stores for the 2020/21 financial year to help them through the crisis.

However on Wednesday, market leader Tesco said it would repay the £585m it had claimed because some of the risks of the crisis were now behind it, and returning the money was “the right thing to do”.

That stance put pressure on rivals to do the same and Morrisons followed, saying it would pay £274m.

Sainsbury’s said it had performed ahead of expectations, particularly since the start of the second national lockdown in England last month.

With regional restrictions likely to remain in place for some time, we believe it is now fair and right to forgo the business rates relief, CEO Simon Roberts said.

Asda CEO Roger Burnley said the group recognised there were other industries for whom the effects of Covid-19 would be much more long lasting.

Tesco CEO Ken Murphy denied its decision to pay was a calculated one to damage competitors who do not share its financial strength.

When we made the decision, we didn’t really think about the competition at all, he told Sky News.

Ken Murphy also said the move was unconnected to Tesco’s plan to pay shareholders a £5 billion special dividend when the sale of its Asian business was completed.

The Co-operative Group said it plans to review its position at end of the year.

M&S and Waitrose owner, the John Lewis Partnership, have said they will not forgo it.

Both groups sell a broader range of products including clothing and homewares.

Important:

The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply