£2bn supermarket rate payback ‘should go to pubs’

By Nikkie Thatcher

- Last updated on GMT

Aid needed: there have been calls for the rate relief paid back by the supermarkets should be given to hospitality
Aid needed: there have been calls for the rate relief paid back by the supermarkets should be given to hospitality

Related tags ukhospitality Kate nicholls Supermarkets Finance

The nearly £2bn worth of rate relief supermarkets are paying back should be handed to the hospitality and tourism sector, in a bid to help the trade survive the coronavirus pandemic, a trade body has said.

A number of the big supermarkets have said they will repay the business rates relief awarded to them during the crisis.

Asda is handing back £340m, Tesco £585m, Morrisons £274m, Sainsbury’s £440m. Altus Group estimated the big six supermarkets (those mentioned plus Aldi about £190m and Lidl approximately £100m) would have saved around £1.9bn in bills during the tax year to 31 March 2021.

Targeted future support 

MA demands a slice of supermarket £1.8bn rates payback for pubs

The Morning Advertiser ​editor Ed Bedington said: “We’re pleased to see that the supermarkets, who have benefited massively during the lockdown and pandemic generally, return the money that they didn’t really need to take in the first place.

“Business rates are a huge challenge for the pub sector, and on top of the unfair targeting of the hospitality sector v retail, to see retailers who are booming getting those kinds of breaks was a kick in the ribs.

“We’re delighted that supermarkets are doing the right thing, and we would call on the Government to use that unexpected windfall to provide further financial support to the pub sector, a sector they have unfairly targeted and left foundering in the wake of their inexcusable decisions which have no basis in science or reality.

“The message is simple: show us the money Mr Chancellor.”

According to The Guardian​, Sainsbury’s will repay £440m of the £490m it was awarded but would be keeping £50m for its Argos stores.

Altus Group analysis found pubs in England and Wales, receiving the one year business rates holiday worth £768.12m.

Head of property tax at the real estate adviser Robert Hayton said: “It is crucial Government ensures future support is targeted to where it is needed, including funding of the Valuation Office, so it can expedite settlement of the tens of thousands of formal challenges against business rates assessments that must now be reduced to reflect the impact of Covid-19 ahead of next year’s bills.

Altruistic gesture

Following Tesco announcing it would be repaying grant support back to the Government, UKHospitality chief executive Kate Nicholls said: “It is an admirable and altruistic gesture from a company that is clearly in a much better financial situation than the vast majority of those in hospitality.

“The question now is what happens to this money, which the Government had intended to invest in supporting businesses.

“We are calling on the Government to earmark that money, to create a fund for those hospitality and tourism businesses that are at high risk of failure, have been closed since March or that have had no grant support, similar to the Cultural Recovery Fund.

“A Hospitality and Tourism Recovery Fund, including rent support to preserve the future of our high streets, would deliver a huge boost to businesses that are only just clinging onto life right when they need it most.”

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