Supermarket giants team up to demand business rates cut

Supermarket giants including Tesco, Sainsbury’s and Morrisons have formed a new coalition to petition the government for a permanent business rates cut funded by the introduction of a new online tax.

According to Sky News, the coalition, calling itself the Retail Jobs Alliance, has written to the chancellor to demand that he “cuts the shops tax”.

The alliance said it would be “making the case for an overall cut in business rates for all retail premises, and we are open to funding this through the introduction of a new online sales tax”.

The latest push by heavyweight industry names comes amid a years-long debate about the balance between the taxation of physical and online retailers as consumers increasingly shift to digital channels.

Earlier this year, the Treasury launched a consultation on the merits of an online sales tax in the wake of a business rates review, which a survey showed a majority of retailers backed.

In their letter to Mr Sunak, the retailer said: “We are all, like you, acutely concerned with pressures on household budgets and the rising cost of living, and we all have a role to play in keeping costs down as far as we can.

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“Business rates – the Shops Tax – are a significant part of retailers’ overheads.

“A meaningful cut in the Shops Tax would make a big difference to retailers’ ability to invest more in the shops and stores that we know customers value, as well as to create jobs.

“This would make it easier for everyone in the retail sector to mitigate inflationary pressures, keep existing shops open and open new ones.”

Signatories of the letter to Mr Sunak include Tesco chief executive Ken Murphy, Sainsbury’s boss Simon Roberts and Co-op interim chief executive Shrine Khoury-Haq.

It pointed out that several of the Retail Jobs Alliance’s members “are businesses with significant online operations as well as physical shops, so would expect to pay any new OST as well as benefiting from a business rates cut”.

“But we agree that cutting the Shops Tax must be a policy priority and that an OST would be acceptable as part of a package of retail tax reform that rebalances the system so that it better reflects how retail works now and helps protect the shops which so many people want to see in their communities.

The Retail Jobs Alliance urged the chancellor to include all retailers, not just smaller ones, in any cut in business rates.

It insisted doing so “could therefore significantly boost the social fabric of our villages, towns and cities.”

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