The Chancellor is expected to hand Aldi and Lidl a tax advantage as the German discounters race to win more shoppers away from Britain’s biggest supermarkets.
New figures suggest Aldi and Lidl are poised to benefit from the Treasury’s planned overhaul to the business rates system, which will ramp up tax costs for their supermarket rivals which have a greater number of large stores.
According to property data company Altus, Tesco, Sainsbury’s, Morrisons and Asda are facing steeper tax bills on more than 1,500 properties under the planned changes which will make it more expensive to run their large supermarkets.
The Treasury has suggested it is looking to apply a higher rate of tax to large properties, with a rateable value of £500,000 or more, to pay for a discount for smaller properties in a major reset of the business rate system.
For Aldi and Lidl, Altus estimates suggest that only 42 stores will fall into the upper band and be subject to higher business rates. This is because generally discounters have smaller stores than the hypermarkets operated by their rivals.
Altus said it expected the “vast majority” of both German retailers’ stores to receive discounted rates under the tax plans given their smaller size.
Alex Probyn, president of property tax at Altus, said: “Aldi and Lidl are likely to be winners.”
It comes as more details emerge over the planned business rates shake-up. The Treasury had previously suggested more of the bill would be picked up by online retailers via their warehouses, raising the tax rate on those sites so it could lower bills for high street stores.
However, in consultation documents, the Treasury said it was also planning to increase property tax bills for large supermarkets and superstores.