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Councils call for ‘Tesco tax’ to aid small businesses

A group of English councils has called on the Government to tax large retailers to help support surrounding local businesses.

Derby City Council wants big retail outlets such as supermarkets to pay a levy, the proceeds of which would be distributed to support small businesses, community areas and parks. 19 other local councils, including Preston, Brighton & Hove and Oxford, are supporting the proposed tax.

The additional business rates charge of up to 8.5% would apply to any large retail outlet with a rateable value of more than £500,000.

The council’s report states: “Research has shown that 95% of all the money spent in any large supermarket leaves the local economy for good, compared to just 50% from local independent retailers; this levy is a modest attempt to ensure more of that money re-circulates within and continues to contribute to local jobs and local trade.”

The Government has six months to respond. If the tax is agreed, it will apply to not just the 20 councils in question, but across the whole of England. Similar taxes already exist in Scotland and Northern Ireland. It is estimated that the levy would cost the big four supermarkets – Tesco, Sainsburys, Morrisons and Asda - £190m annually in extra taxes.

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