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Business rates: Sainsbury's boss urges 'fundamental reform' | Business rates: Sainsbury's boss urges 'fundamental reform' |
(about 1 hour later) | |
The chief executive of Sainsbury's has called for "fundamental reforms" to business rates, amid concerns increases could spark High Street store closures. | The chief executive of Sainsbury's has called for "fundamental reforms" to business rates, amid concerns increases could spark High Street store closures. |
Mike Coupe called the system, pegged to property valuations, "archaic" and ignored the rise of online shops based in out-of-town warehouses. | Mike Coupe called the system, pegged to property valuations, "archaic" and ignored the rise of online shops based in out-of-town warehouses. |
From April the effects of the rate revaluations will be felt and business groups have been asking for help. | |
The government says the majority of firms will pay the same or less. | The government says the majority of firms will pay the same or less. |
Authorities in Scotland and Wales have also undertaken revaluations, the effects of which will also be felt in April. | |
Companies with properties concentrated in the south-east of England and urban centres are likely to be disproportionately impacted by the first revaluation since 2010. | Companies with properties concentrated in the south-east of England and urban centres are likely to be disproportionately impacted by the first revaluation since 2010. |
Retailers in some areas could face rises of up to 400%. | Retailers in some areas could face rises of up to 400%. |
But the government says although more than 500,000 businesses will see their rates increase, 1.34m will see a fall or no change. | But the government says although more than 500,000 businesses will see their rates increase, 1.34m will see a fall or no change. |
Reality Check: Are there more winners than losers on business rates? | Reality Check: Are there more winners than losers on business rates? |
Mr Coupe, boss of the UK's second-largest supermarket chain, urged the government to undertake a wide-ranging review of the way businesses are taxed, highlighting changes in retailing culture. | Mr Coupe, boss of the UK's second-largest supermarket chain, urged the government to undertake a wide-ranging review of the way businesses are taxed, highlighting changes in retailing culture. |
Mr Coupe said: "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. | Mr Coupe said: "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." | "Businesses like ours with lots of property and employees face a bigger burden than others." |
Referring to the revaluation plans, he said: "As it stands, we could see High Streets face serious challenges and ultimately more closures. | Referring to the revaluation plans, he said: "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." | "It could impact investment in places that most need it, in areas of the country where there is already a marginal call on investment." |
How are business rates calculated? | How are business rates calculated? |
Rates are calculated by multiplying the rateable value of a property by a multiplier set by the government. But as property values change over time, rateable values need to be reassessed periodically - usually every five years. | Rates are calculated by multiplying the rateable value of a property by a multiplier set by the government. But as property values change over time, rateable values need to be reassessed periodically - usually every five years. |
However, this update to property values is two years behind schedule, making it a harder pill to swallow in areas where the price of real estate has been rising. | However, this update to property values is two years behind schedule, making it a harder pill to swallow in areas where the price of real estate has been rising. |
According to analysts, Sainsbury's will see its annual rates rise to £500m, up from £483m, while internet giant Amazon will see its bill cut. | According to analysts, Sainsbury's will see its annual rates rise to £500m, up from £483m, while internet giant Amazon will see its bill cut. |
Rate increases could also hit NHS hospitals in some areas, as well as pubs and hotels. | Rate increases could also hit NHS hospitals in some areas, as well as pubs and hotels. |
On Friday, business groups - including the British Retail Consortium and the CBI - signed a letter urging the government to drop the revaluation plans. | On Friday, business groups - including the British Retail Consortium and the CBI - signed a letter urging the government to drop the revaluation plans. |
Pubs and restaurants have also called on the chancellor to dilute the impact of the changes by providing more transitional relief for the sector. | Pubs and restaurants have also called on the chancellor to dilute the impact of the changes by providing more transitional relief for the sector. |
Meanwhile, the Sunday Telegraph has reported that ministers considered extra financial support to ease the impact of business rates before the general election in 2015. | Meanwhile, the Sunday Telegraph has reported that ministers considered extra financial support to ease the impact of business rates before the general election in 2015. |
According to the paper, the Department for Communities and Local Government worked with the Treasury to protect the sector, but eventually decided to adopt more modest reforms. | According to the paper, the Department for Communities and Local Government worked with the Treasury to protect the sector, but eventually decided to adopt more modest reforms. |
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. | 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. | "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 £3.6bn scheme to support companies affected by the business rates revaluation." | "Across the country, there's also a £3.6bn scheme to support companies affected by the business rates revaluation." |