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Thursday, July 29, 2021

Tesco will return £585m in business rates relief

Tesco will return £585m that it received as part of a business rates relief package.

The company was grateful for the financial support but stated it had remained “resilient” despite the pandemic.

It stated that whilst the money was game changing it would be returning it in full.

It will be able to return the money thanks to it’s efficient handling of the pandemic crisis.

“We will work with the UK government and devolved administrations on the best means of doing that.”

Business rates relief was extended to all retailers as part of a £10bn package back in March.

At the time there was “a real and immediate risk to the ability of supermarkets to feed the nation”, according to Tesco.

“We are immensely grateful for the financial and policy support provided to us by the governments of the UK. 

“This was a game-changer and allowed us to ensure customers got access to the essentials they needed.”

What are business rates?

Tesco will return £585m

Business rates are a tax on most properties used for a business purpose.

How much a company pays per property depends on there ‘rateable value’ which is determined by it’s estimated value on the open market.

Business rate relief was offered to businesses in the leisure, hospitality and retail sectors in order to take the edge off the financial disruption caused by Coronavirus.

This means they won’t pay business rates for the tax year of 2020 – 2021.

Tesco will return £585m, but not because it didn’t need the money

Tesco said it was able to use “every penny” to invest in colleagues and support it’s customers and suppliers.

The money gave the company some measure of security in a time of uncertainty to make business saving decisions.

“Every penny of the rates relief we have received has been spent on our response to the pandemic.

“Our latest estimate at our interim results in October was that Covid would cost Tesco [about] £725m this year – well in excess of the £585m rates relief received.

“Ten months into the pandemic, our business has proven resilient in the most challenging of circumstances.

“While all businesses have been impacted – many severely so – we have been able to continue trading throughout, serving many millions of customers every day and although uncertainties still exist, some of the potential risks faced earlier in the year are now behind us.”

Ken Murphy, Chief Executive of Tesco said: “Giving this money back to the public is absolutely the right thing to do by our customers, colleagues and all of our stakeholders.”

Source:

https://www.bbc.co.uk/news/business-55156904

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