Sainsbury’s boss blasts “archaic” business rates

Sainsbury’s boss Mike Coupe has attacked the business rates system, demanding fundamental reform of an “archaic” system that gives online retailers the advantage over bricks and mortar operations.

Coupe told the Press Association that bricks and mortar retailers operated with “bigger burdens” in terms of employees and property, than those who operated purely online.

“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,” 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.”

“Our challenge to the Government is for a fundamental reform of business rates, because we believe it is an archaic and outdated system. More than that, we’d like the Government to look at business taxation in general.”

It comes as one independent wine shop revealed to db that business rates on one of their sites was set to rise by around 87%.

Around 500k businesses are set to have their rates increased in April, following a review of business rates two years ago. There are also changes to the appeals process, which will make it more difficult for businesses to raise an appeal and thereby reduce the overall number of appeals.

Coupe’s comments come as the British Retail Consortium (BRC) joined with other businesses to challenge the new appeals process. BRC CEO Helen Dickinson called for “a collaborative working relationship between the Valuation Office Agency and ratepayers, where information and evidence can be shared and appeals avoided, should be sought”.

The Association of Convenience Stores (ACS)  – whose members include smaller independent businesses and fascia groups, as well as suppliers such as Conviviality Retail, Wine Rack, Booker, The Co-op, Palmer & Harvey, and Spar – has also called on the government to rethink the system.

Last week, ACS chief executive James Lowman said the organisation did not believe the current system was fair. “[We] have called on the chancellor to look at whether the rates bills for internet distribution warehouses are appropriate when compared to their high street counterparts,” he said in a statement.

Lowman also noted that “while the current business rates system provides relief for some of the smallest stores, one in three convenience store retailers are set to see their rates increase as a result of the revaluation.”

He previously said it was unfair that businesses who had invested in their premises were being penalised for doing so by having their rateable value increased. However, the ACS lauded the change whereby businesses that have a single site and a rateable value of under £12,000 will pay no business rates from April.