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Sainsbury's boss blasts 'archaic' business rates set-up

The chief executive of Sainsbury's has waded into the row over business rates, calling for "fundamental reforms" to a system that will see internet giant Amazon have most of its bills cut while high street retailers are forced to stump up billions.

Mike Coupe blasted the current set-up, describing it as "archaic" and called for a "level playing field" as pressure mounts on the Government to take a fresh look at the controversial levy.

He told the Press Association: "The way it currently stands, there is an advantage for those without bricks and mortar operations, so there's a strong case for a level playing field in business rates and taxation more generally.

"Businesses like ours with lots of property and employees face a bigger burden than others."

The Government's first rates overhaul in seven years, which comes into effect in April, has brought into sharp focus the tax discrepancy between businesses dependent on consumer facing properties and those that are not.

Sainsbury's will be forced to fork out around £500 million, up from £483 million.

Amazon, meanwhile, will have its business rates bill cut at the majority of its out of town warehouses, according to analysts.

Business rates are pegged to property valuations so companies with properties concentrated in the South East and urban centres will be disproportionately impacted by the revaluation.

London firms alone will be forced to stomach a £9 billion increase in rates over the next five years, while those in the North are likely to see bills reduced or stay the same.

Pubs, NHS hospitals and hotels are also among those set to be landed with hefty increases in their bills.

Some retailers will see their business rates increase by 400% as fears mount that the revaluation will result in a raft of store closures.

Mr Coupe echoed those concerns, warning that investment could be slashed and high streets deserted if Theresa May pushes the revaluation button.

"As it stands, we could see high streets face serious challenges and ultimately more closures. It could impact investment in places that most need it, in areas of the country where there is already a marginal call on investment," he said.

The supermarket chief called on the Government to undertake a wide-ranging review of the way businesses are taxed, taking into account changes in the retail landscape, such as the rise of digital-only players.

"Our challenge to the Government is for a fundamental reform of business rates, because we believe it is an archaic and outdated system. More than that, we'd like the Government to look at business taxation in general."

His comments come after a host of business groups - including the British Retail Consortium and the CBI - signed a letter on Friday urging the Government to abandon the controversial rates reforms.

For its part, the Government has accused those that have raised concerns of "scaremongering", claiming that the majority of firms will see a drop in rates or no change to their bills.

A Government spokesman said: "Nearly three quarters of businesses will see a fall, or no change, in their business rates as a result of the revaluation.

"The generous reliefs we are introducing mean that 600,000 small businesses are paying no rates at all - something we're making permanent so they never pay these bills again.

"Across the country, there's also a £3.6 billion scheme to support companies affected by the business rates revaluation.

"We are cutting corporation tax, slashing red tape, and have doubled Small Business Rate Relief. Our business tax system is currently ranked as one of the most effective in the world."

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