Morrisons to return £274m in business rates relief

Morrisons has committed to repaying business rates relief for the coronavirus pandemic back in full to the Government, following in the footsteps of Tesco, which said it would return £585m.
Morrisons has followed in Tesco's steps and announced it will be returning the business rates relief.Morrisons has followed in Tesco's steps and announced it will be returning the business rates relief.
Morrisons has followed in Tesco's steps and announced it will be returning the business rates relief.

The big four supermarkets are facing calls to hand back the savings which were aimed at retailers that were unable to open and were struggling to make ends meet.

Tesco’s chairman John Allan said the board is “conscious of our responsibilities to society” and that the company did not need the cash as it remained open and traded strongly throughout the pandemic.

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Real estate adviser Altus Group projected that the UK’s big four grocers – Tesco, Sainsbury’s, Asda and Morrisons – and German rivals Aldi and Lidl would save around £1.87bn as a result of the rates holiday.

This was worth more than a sixth of the total £10.1bn rates bill which has been written off for all businesses during the year.

The figures from Altus show that Leeds-based Asda is projected to save £297m.

Bradford-based Morrisons tonight said it will return £274m in rates relief, of which £230m relates to 2020/21.

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Morrisons said it expects direct Covid-19 costs to be around £270m, around.£40m more than its estimate at the firm's 2020/21 interim results, and significantly higher than the £230m in-year business rates relief.

The firm added that profit had been significantly impacted throughout the year by the extra costs of doing business during the pandemic, with many of its cafes and market street counters facing temporary closure. Morrisons said those costs have been exacerbated recently by the impacts of the second lockdown and tier system.

However, it is still expecting underlying pre-tax profits and exceptionals to be in line with its expectations.

Asda has not yet responded to requests by The Yorkshire Post to say whether it intended to hand the money back.

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The data showed that Sainsbury’s is expected to save £498m from its rates holiday for the year, although Sainsbury’s said it was closer to £450m.

Last month, Sainsbury’s said it had received a break worth £230m for the six months to September in an update which also saw it reveal plans to axe 3,500 jobs.

Tesco said it will work with the Government on how best to hand over the money.

Mr Allan said: “The board has agreed unanimously that we should repay the rates relief we have received. We are financially strong enough to be able to return this to the public, and we are conscious of our responsibilities to society.

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“We firmly believe now that this is the right thing to do, and we hope this will enable additional support to those businesses and communities who need it.”

In October, Tesco revealed it made a pre-tax profit of £551m in the six months to August 29 – a 29 per cent increase on the same period in 2019.

Tesco’s chief executive, Ken Murphy, said: “We have invested more than £725m in supporting our colleagues, putting safety first, more than doubling our online capacity to support the most vulnerable customers in our communities, and hiring thousands of additional colleagues at a time of need.

“While business rates relief was a critical support at a time of significant uncertainty, some of the potential risks we faced are now behind us. Every decision we’ve taken through the crisis has been guided by our values and a commitment to playing our part. Giving this money back to the public is absolutely the right thing to do.”

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