Struggling small shops 'subsidising supermarkets' after business rates revaluation delay

Bill Grimsey, who this year launched an alternative high street review to Mary Portas, claimed that the controversial decision to delay a revaluation of business rates from 2015 to 2017 will save the big four supermarkets £1.3bn in tax while smaller retailers suffer.

He said Tesco, Asda, Sainsbury’s and Morrisons will save £620m in 2015/16 and £639m in 2016/2017.

Grimsey will highlight the research while submitting evidence to the Business Innovation and Skills’ retail inquiry this morning.

Grimsey said: “All the evidence suggests that small businesses, many of which are really struggling at the moment, are going to be subsidising the big four supermarkets as a result of the Government’s decision to postpone the business rates revaluation. That cannot be right and it can’t be fair. This is a policy that’s helping those with the broadest shoulders and punishing the little guy who’s close to the edge.”

He argues that the value of the grocers’ property is likely to have increased since the last valuation in 2008, while the value of smaller retailers’ property on the high street as declined as the recession pulled most rental values down.

Grimsey has based his claims on forecasts from property firms regarding the value of supermarkets and data from the Valuation Office Agency.

Paul Turner-Mitchell, a member of the Grimsey Review which produced the report, said: “The purpose of a rates revaluation is to achieve fairness of tax liabilities by ensuring rateable values are based upon up-to-date rental values. It should redistribute liability in line with relative movements in property values since the previous revaluation, but it’s failing to do this. Delaying the revaluation creates unfairness by requiring struggling businesses to subsidise those that have fared relatively better.”