Large retailers in NI could be hit with 'Tesco tax'

The Finance minister, Sammy Wilson, has launched a consultation that could see big retail stores paying a lot more in rates and smaller businesses less.

It would mean 26 companies with 77 retail premises paying an extra £85,000 a year in rates per premises.

This would equate to an average rates saving for small businesses of around £750.

Department of Finance sources said they believe that Tescos will be the company worst affected.

Sammy Wilson said the executive wanted to create the right conditions for a sustained economic recovery.

Case in point

"The downturn has been very difficult for most sectors of the economy but some have fared better than others during this period," he said.

"The large retail sector is a case in point.

"I think it is right that additional small businesses get help and this should be funded by asking the largest retailers to pay more," he added.

The minister is proposing that the changes, that are being introduced because of the economic downturn, last for three years.

The consultation will run for 16 weeks until 18 October.

The levy, which is regarded as a recycling of money by the finance department, is not expected to put any further pressure on the public purse.

Sources told the BBC they would not be surprised if large retail stores or a representative body was to legally challenge the minister's preferred option if he proceeds with it after the consultation.

The Northern Ireland Independent Retail Trade Association's (NIIRTA) chief executive Glyn Roberts said: "These are excellent proposals which will be welcomed by independent retailers and small business owners in every part of Northern Ireland.

"This scheme is of vital importance to thousands of small businesses and independent retailers who are struggling to pay their rates bills.

Threat

"The reality is that the big high street retailers such as Asda, Tesco and many others continue to make billions of pounds of profit and have performed well during the recession."

The Northern Ireland Retail Consortium (NIRC), which represents multiple retailers in Northern Ireland, warned the plans were a threat to future economic prosperity.

NIRC director, Jane Bevis, said: "The retail sector as a whole - small and large retailers alike - is paying too high a proportion of the business rates bill.

"We agree small retailers need a helping hand.

"We agree town centres need investment and regeneration. But the large retailer levy, which will also apply to large stores on the high street, could make things worse for everyone," she added.