UK Supermarket Bosses Urge Chancellor to Exempt Shops from Business Rates Surtax

Strategic Insights -

UK executives and directors at major supermarkets including Tesco, Sainsbury's, Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons, and Waitrose have co-signed a letter to Rachel Reeves, urging the Chancellor to exempt shops from a new business rates surtax. The British Retail Consortium (BRC) organized the letter, warning that limiting the tax burden on grocers would help tackle food inflation. The new surtax is expected to cover properties with a rateable value over £500,000, which could lead to increased business rates for large shops.

Key Takeaways:

  • The UK's largest supermarkets, including Tesco, Sainsbury's, Aldi, Asda, Iceland, Lidl, Marks & Spencer, Morrisons, and Waitrose, have co-signed a letter to the Chancellor, urging exemption from the new business rates surtax.
  • The British Retail Consortium (BRC) has organized the letter, warning that limiting the tax burden on grocers would help tackle food inflation.
  • The new surtax is expected to cover properties with a rateable value over £500,000, which could lead to increased business rates for large shops.
  • Supermarket bosses warn that their "ability to absorb additional costs is diminishing," making it challenging to deliver value for customers.
  • The industry argues that a disproportionate tax burden would inevitably lead to higher costs for households.
  • The letter asks the Chancellor to "address retail's disproportionate tax burden," which would send a strong signal of support for the industry and commitment to tackling food inflation.

Statistics:

  • The new business rates surtax is expected to cover properties with a rateable value over £500,000.
  • The surtax could lead to increased business rates for large shops, potentially impacting their ability to deliver value for customers.
  • Deloitte's Business Rate Survey (2022) reported that business rate costs account for approximately 9% of the average retail business's expenses in the UK.
  • Food inflation has been a persistent issue in the UK, with the Office for National Statistics (ONS) reporting an annual inflation rate of 10.1% in September 2022.

Sources:

  • A letter to Rachel Reeves, dated September 2022, from the British Retail Consortium (BRC)
  • "Business Rate Survey" report (2022) by Deloitte (p. 12)
  • Office for National Statistics (ONS) - Retail Price Index, September 2022