Asda to repay £340m in business rates relief

The grocer said today it would repay the £340m it had received in business rates relief in full to the UK government and devolved administrations. 

It comes after Tesco, Morrisons, Sainsbury’s and Aldi all made the move in the last 24 hours, returning in excess of £1.7bn in tax breaks back to the government. 

“Despite the significant operational challenges created by Covid-19, we have successfully and safely served customers in our stores since March, kept our prices low, expanded our online business and provided deliveries to protect the vulnerable,” said Asda in its statement. 

“This reflects the significant resilience of our business and incredible efforts of our colleagues.”

Asda president and chief executive Roger Burnley added: “Throughout the pandemic, we have always sought to do the right thing – fulfilling our role in feeding the nation, protecting our colleagues and supporting our communities. 

“But, as the hope of a vaccine and a more ‘normal’ life returning in 2021 grows, we have confidence that we are in a strong position to again do the right thing for the communities we serve.

“Almost half our customers are telling us they expect their financial position to worsen in the next 12 months and we recognise that there are other industries and businesses for whom the effects of Covid-19 will be much more long lasting and whose survival is essential to thousands of jobs. 

“We will therefore be discussing with the government and devolved authorities the best mechanism to ensure the relief we have received can go towards helping those that need it most.”

Discounter Lidl is yet to confirm what it will do with the business rates relief it received. Waitrose, the food arm of John Lewis, has said it will not be returning its tax breaks due to the struggles of its parent company and the cancellation of the traditional staff bonus. 

Thoughts will now likely turn to what the government plans to do with this in excess of £1.7bn windfall. 

UK Hospitality chief executive Kate Nicholls has called on the government to use the money to establish a Hospitality and Tourism Recovery Fund.

She 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.”