Sainsbury's superstores set for £40m business rates tax cut

 
Helen Cahill
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Business rates changes came into effect at the beginning of April (Source: Getty)

Sainsbury's superstores are in line for a £40m tax cut following changes to business rates.

The supermarket's boss Mike Coupe has previously called for fundamental reform of the business rates system, saying that businesses like Sainsbury's face a disproportionate burden because they have large property portfolios.

Read more: Businesses warn Hammond business rates have reached a "tipping point"

However, analysis by business rates specialists CVS shows Sainsbury's largest stores will benefit from a property tax cut of £40.6m over the next five years.

Sainsbury's has 607 supermarkets across the UK, and 805 convenience stores. A spokesperson for Sainsbury's said that when the taxes for all the business' outlets are added together, the total has risen "quite significantly" over the last year.

Mark Rigby, chief executive of business rates specialists CVS, said that as the overall burden of business rates increases, small and medium sized businesses needed "confidence that fairness is at the heart of the tax system".

Read more: Sweet relief: City in line for nearly £10m to help with business rates hike

Coupe said:

Business rates are an analogue tax, not fit for the digital age. The UK needs wholesale reform of business taxation. We would ask the government to carry out a root and branch review of business taxation to create a level playing field across all businesses, rather than penalise property-based companies.

Last month, business rates changed for the first time in seven years. Property taxes for the UK's 1.8m commercial properties were reevaluated, and the government made changes to how businesses dispute their tax bill.

However, the appeals system has run into difficulties. The government spent £3.1m on the new online system, but the website has been breaking down, making it difficult for business owners to challenge the government's property tax assessments.

The Valuation Office Agency, which processes ratepayers' appeals, has claimed the website is "working normally", and has promised that new features will be added to the site over the next year.

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