The chief executive of one of Britain’s best known retailers, Tesco, has criticised the UK’s business tax structure, and says that high taxes are killing the supermarket’s profits.
Ahead of the Budget on Wednesday, the Retail Gazette reports that Dave Lewis, the supermarket’s head, said employment in “bricks and mortar” retail chains would be massively affected if business rates weren’t “fundamentally reformed”.
“Business rates cost nearly £700 million ($1 billion) a year for Tesco alone in taxes and this is in an industry that is already under enormous pressure. If we are not careful, the rates will keep piling on the burden for retailers.”
Lewis went on to say that Tesco’s business rates bill had increased 35% of the last five years and that “property values have fallen, profits are down, but business rates are up. That’s an enormous pressure: shops closed, businesses lost, jobs sacrificed.”
It’s not the first time Lewis has had a go at government regulation. At the end of last year he criticised high business taxes and the national living wage as a “lethal cocktail” and said rates were partly responsible for Tesco’s lousy 2015.
Despite a much better than expected Christmas period, Tesco’s share price was down on Monday at £1.92 ($2.75) from £1.98 ($2.84) last Tuesday.
The government defines business rates as charges on most non-domestic properties such as “shops, offices, pubs, factories and warehouses.”
Farm buildings and land, places of worships and properties for training or welfare are among those exempt from business rates.