News | Published November 03 2019

Former Sainsbury’s boss calls for business rates to be halved

Justin King, the former boss of Sainsbury’s, has stated that he believes VAT ought to be increased to 22 per cent in order to save the high street.

The same motivation led him to suggest business rates be halved.

At present, business rates are a tax established by the open market value of properties used for businesses. Every three years they are recalculated.

The comments follow the British Retail Consortium’s estimation that over 85,000 jobs have been lost in the retail sector in the past year.

King feels the changes would aid bricks-and-mortar retailers, who currently face a greater tax burden than their online counterparts.

He stated: "the services that those business rates pay for are used by online retailers.”

King continued, "they drive on the roads that are maintained by them, the brown cardboard boxes they deliver are collected by dustmen or taken to tips paid for by those business rates."

The former boss of Sainsbury’s rejected claims that the decision would result in a price increase for consumers, instead stating that "all taxes are paid by consumers”.

He elaborated, "retailers in our High Streets up and down the country pay business rates, that's passed on to consumers in pricing.”

King continued, "so if they see a reduction in their business rates but VAT has gone up - and that is of equivalent value - you won't see any price moves at all."

The comments come after the Parliament’s Treasury Committee call for reform to the current system.

Alison McGovern, the MP who is leading the inquiry, stated "it's abundantly clear that the current business rates system is broken.”

She continued, “the tax represents an increasing burden on businesses, particularly those with a physical High Street presence struggling to remain competitive."

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Authored by

Alice Jaspars
Culture Editor
November 03 2019

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