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Tesco Boss Demands Business Rates Reform

The boss of Tesco has warned that if the government does not reform business rates soon it will have contributed to the decline of high streets across Britain.

 

The plight of retailers has garnered some support from Tesco.  The supermarket group’s chief executive, Dave Lewis, has spoken out against business rates and the damage they inflict on small businesses. This is a sentiment that is shared by most of the business community. Affectionately known as the lifebloods of the economy, small businesses have constantly seen their success derailed by online competition, the struggle to attain finance and the biggest kicker: business rates. These taxes are increased over the years, attacking brick and mortar stores and inspiring displeasure from SMEs and their allies.

In a recent article for The Times, Dave Lewis described the “heavy burden” laid on a “shrinking industry”. These business rates have been controversial for many years, with industry bosses demanding their termination. The retail industry is feeling particularly vulnerable at present, with low demand and online competition bringing down profits. The presence of business rates is further weakening their position.

Mr Lewis understands the strain from business rates, with Tesco’s own rates bill totalling almost £700 million. Rival European countries tax their business a considerably smaller percentage, with France and Germany taxing at 1 per cent compared to the UK’s 4.5 per cent. With the Brexit deadline edging closer, this could inspire domestic firms to depart for greener pastures.

 

Mr Lewis, who is in the middle of implementing a turnaround at Tesco, said in 2015 that retailers faced a “lethal cocktail” of rising taxes and costs at a time of falling profits. Yesterday he said that distress on the high street, where House of Fraser recently failed, showed his prediction was coming true.

The Credit Protection Association champions small businesses and is in full support of the sentiment expressed by Mr Lewis. Unfortunately, it is the responsibility of the government to decrease (or terminate) business rates and so far they have proved unwilling. At CPA we provide our Members with financial respite from any gruelling business rates- as well as anything else.

Our Members at CPA are both suppliers to the retail industry, as well as traders within it. They have painted a picture of the industry, how low profits and tough competitors have persistently drained their resources and prosperity. We have responded with our debt recovery services, freeing up cash flow and restoring the financial strength that business rates have threatened. Our credit monitoring services have additionally acted as a second form of defence, utilising credit reports and County Court data to sidestep late payers and prevent further fatalities on the high street.

 

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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The Latest Insolvencies to 11 Sep 2018

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