Greggs boss Roger Whiteside has called for the 海角视频’s business rates system to be reformed, saying that the £25m the company currently pays each year no longer reflects the value of its shops.
Mr Whiteside joins a number of business leaders in criticising the current business rates system, which is based on the value of company’s physical locations.
Campaigners say the rates system does not reflect the value of businesses in the digital age, and has led to much lower payments for companies such as Amazon which sell goods online but don’t have a presence in often expensive city centres.
But they were left disappointed earlier this year when the Government deferred the next valuation of shops and other business premises until 2023.
Businesses have been given a holiday from business rates as part of measures to support firms introduced by the Government during the coronavirus pandemic.
But Mr Whiteside said: “Everybody recognises something needs to be done. The difficulty is coming up with an answer that’s equitable to all parties.
“Fundamentally, what we’re arguing for is that rates are a form of taxation based on property but those property values were reflective of times pre-Covid. Even before Covid, rates were out of sync with real property values because they aren’t re-valued every year.
“So there was was already a flaw in the basis of that taxation system. That’s been exaggerated and accelerated by the Covid crisis because clearly these rates just make no sense based on a property value relative to the values that prevail post-Covid. We’re all now paying too much property tax, we need to get that tax down.
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“But the problem for the Government is that they know that, but at the same time they need tax, so how do they get tax from somewhere else if they bring our tax down? It’s a difficult question.
“The message now is that we’re paying disproportionately high levels of tax because it’s based on property and the property values themselves has fallen. That tax should fall too. It’s not good enough to just defer it, it needs to be re-based.”
Mr Whiteside said he was not arguing for an online tax to replace the current business rates system, as some retailers have.
Greggs’ chief financer office Richard Hutton said there was an “increasing understanding that this is not a sustainable way of enforcing taxation and it is increasingly skewed towards businesses like ours and other retailers”.
But he added that the company was not banking on any change in the system by the time the business rates holiday is wound up next March.
Greggs said earlier this week that it was looking to cut staff after sales fell well below last year’s levels during the pandemic. It hopes to reduce the number of redundancies if existing workers accept a reduction in hours or being moved to any new shops that open.