Labour vows to take on big business over rates

By James Buckley - Tuesday, April 11, 2017 12:38

The leader of the Labour Party, Jeremy Corbyn, today told that Federation of Small Business that a Labour Government would introduce a radical reform of business rates, to stop giveaways to big corporations at the expense of small businesses.

Corbyn also accused the Government of bias against small business in favour of big business whilst vowing to protect small firms and the high street.

An analysis by business rent and rates specialists CVS previously showed that the nine distribution centres of Amazon in England and Wales would benefit from a £148,000 reduction in property tax liabilities this month.

Sajid Javid the Secretary of State for DCLG has already vowed to "level the playing field" between online retailers and high street shops with the Chancellor saying at the Budget that the digital part of the economy needed to be better taxed in the medium term - although no specific measures were announced to do this.

A number of other online retailers like Shop Direct who process 25 millions parcels a year from its Oldham base have seen a tax cut of 2.12% this month for its distribution centre with ASOS also receiving a 2.12% tax cut on its centre in Barnsley which is the size of six football pitches. AO.com have also received a 2.12% tax cut for its base in Crewe. 

Whilst online giants see tax reductions on its distribution centres, business rate bills for superstores across England and Wales have also fallen and are set to fall by a staggering £199.68million over the next 5 years of the new rates regime say CVS.

The Big 4 such as Tesco, Asda, Morrisons and Sainsburys currently pay between them £1.51bn in rates on their largest superstores which is set to fall over the next 5 years to £1.47bn per year on average say CVS.

Tesco is expected to report a group operating profit of more than  £1.2bn which had been pencilled in by city analysts. 

Corbyn said of a possible land value tax to replace business rates: "I'm interested in the idea... We are looking at it" but stressed no commitment. 

Mark Rigby, Chief Executive of CVS Business Rent and Rates Specialists said: "I am heartened that the Labour Party will be looking closely at all possible steps for making the system fairer and more sustainable in the long term. This, I believe, can be achieved through evolution not revolution."

"It cannot be right that NHS hospitals in England pay normal business rates but certain private hospitals, using charitable status, receive 80% discount. The position is the same with state schools and their private school counterparts. As the overall burden continues to rise, businesses particularly SMEs, must have the confidence that fairness is at the heart of the tax system."

jbuckley@costar.co.uk

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