Sainsbury’s share price: BRC forms committee to seek alternatives to business rates

on Nov 21, 2013
Updated: Oct 21, 2019
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iNVEZZ.com, Thursday, November 21: J Sainsbury Plc’s (LON:SBRY) Chief Financial Officer John Rogers will chair a committee formed by the UK’s biggest retailers that will try to find an alternative to the business rates system, The Telegraph reported today. The committee is being put together by the British Retail Consortium (BRC) and will include top tax and finance figures from high street and online retailers.

The formation of the new committee comes after BRC’s appointment of accountancy firm EY last month, to support the process of examining the options for reforming the business rates system. That move was prompted by the rise in the Retail Price Index for September, which is expected to result in a hefty increase in business rates on retailers next year.

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In today’s trading, Sainsbury’s shares were 0.22 percent down at 403.90p as of 11:37 UTC.
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
**Viable alternative**
The BRC committee will work with EY to develop an alternative tax system that promotes growth and has “acceptable distributional impact” but at the same time does not “materially reduce revenues” for the Treasury. The move comes amid growing pressure on Chancellor George Osborne from businesses demanding reform of the system.

The Treasury’s tax take from business rates is expected to increase by another 11 percent over the next two years to £29.6 billion, meaning that it will surpass fuel duties and council tax.
The Telegraph quoted Rogers as saying: “Reforming business rates is a critical factor in achieving solid and stable growth across the entire retail sector in the future.”

The committee plans to present the findings from its research next year, hoping that they will offer the Treasury a viable alternative to the current system.
**Impact on UK retailers**
Kingfisher’s Chief Executive Officer Ian Cheshire, who also chairs the BRC, told that a new tax system that “does not punish retailers for keeping shops open” would be “good for all of us” and would bring opportunities to people across the country.

In a press release related to the appointment of EY last month the BRC said that the increase in RPI for September will translate to an increase in business rates on retailers of £242 million per annum. For every £1 in corporate tax retailers will have to pay £3.44 in business rates, compared with £2.48 per £1 in corporate tax in 2005, the retail body estimated. The BRC warned that the latest increase puts some 20,000 full-time jobs at risk due to closure of shops and reduced investment.
**As of 13:18 UTC buy Sainsbury’s shares at 403.50p**
**As of 13:18 UTC sell Sainsbury’s shares at 403.30p**
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.

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