Tesco to benefit from business rates cut while smaller firms suffer
Tesco is in line for a £105 million business rates cut on its biggest stores over the next five years, while small firms are set to be hammered with crippling hikes.
The revelation comes days after the supermarket giant reported profits of over £1 billion and as Communities Secretary Sajid Javid prepares to be grilled by fellow 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 £13 million this year alone, from £450 million to £437 million.
CVS estimates Tesco will save upwards of £100 million over the next five years as a result.
"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," CVS chief executive Mark Rigby said.
Smaller retailers across the country are being hit with crippling rises, with some having to stomach increases of well over 50%.
Tesco disputes the tax cut as "inaccurate", but declined to say how much their largest stores would save under the revaluation.
A spokesman for the grocer said: "Tesco is one of the UK's largest rate payers, paying almost £700 million 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."
The figures are based on published government data for property values in 2010 and 2017 and look at 563 of Tesco's largest stores, classed as superstores, in England and Wales.
The news is likely to pile more pressure on the Government over its April 1 changes to business rates, the commercial equivalent of council tax.
A raft of revelations have reinforced calls for a reform of the system that has been slammed as unfair and illogical.
Mr Javid will face down MPs on the Communities and Local Government Committee on Wednesday over the Government's much criticised handling of the revaluation.
Causing further embarrassment to Theresa May, the Press Association has recently revealed that firms linked to millionaire Tory MPs, Chancellor Philip Hammond and his predecessor George Osborne, are to receive hefty business rates discounts.
According to CVS' analysis of 563 of Tesco's largest format stores in England and Wales, the supermarket's Rateable Value has fallen by 8.6% to £825.78 million compared to 2010.
It follows a 2015 writedown of the value Tesco's property portfolio by £4.7 billion.
New rateable values, which came into force on April 1, will determine tax bills for the next five years and are based upon property valuations as of April 1 2015.