Supermarkets pocket £1.3bn rates ‘relief’

Artificially high business rates are leaving independent stores high and dry while the major supermarkets trouser £1.3bn, research has revealed.

The delay of the rates revaluation by two years to 2017 means local shops are subsidising the likes of Tesco and Sainsbury’s as rates no longer accurately reflect property values.

Former Iceland boss Bill Grimsey, whose team commissioned the research, presented his findings to MPs at the Commons Select Committee for Business, Innovation and Skills.

He said: “It’s desperately unfair and just plain wrong.”

Committee member and Labour MP Ann McKechin told Retail Express that independent businesses, which are the “bread and butter” of the retail industry, should not see their taxes rise while supermarkets watch their bills drop.

“If you are in an outlying area of Essex you are effectively now subsidising shops in Regent Street,” she said.

“The tax bill of big corporations is going down but the average corner shop’s tax bill is going up. Perhaps now is the time to look again at whether the current formulation for business rates is fit for purpose.”

Last month, it was announced business rates are set to rise by 3.2% in April 2014, and the latest research adds insult to injury for independent shops.

Labour and Co-operative MP Adrian Bailey, who chairs the committee, said: “It’s absurd that major retailers, many of whom operate in out-of-town centres, are benefiting while independent retailers are getting crucified.”

Committee member and Conservative MP Robin Walker said there is a case for fundamental reform and that something must be done to help independent convenience stores that give high streets their “social value”.

“It’s not acceptable to hand a massive cheque to the supermarkets,” he said.

The committee is due to present its report with recommendations before Christmas.