Lidl has become the latest major UK retailer to forgo COVID-19 tax relief granted by the government earlier this year.
Lidl, Britain’s seventh biggest supermarket, said on Friday it would pay the government £100m ($135m) to reflect the tax savings it has made from business rates relief during the pandemic.
“The business rates relief that was provided to us, and the rest of the supermarket sector, came with a lot of responsibility that we took extremely seriously,” Lidl’s UK chief executive Christian Härtnagel said in a statement.
“We’ve been considering this for some time, and we are now in a position to confirm that we will be refunding this money as we believe it is the right thing to do.”
Lidl’s announcement follows rivals Tesco (TSCO.L), Sainsbury’s (SBRY.L), Asda (WMT), and Aldi, which have all pledged to return business rates relief in recent days. Other major retailers Pets at Home (PETS.L) and B&M (BME.L) have also said they will give up the tax break.
Business rates are a tax charged on business premises. The government announced a temporary tax holiday for retailers in March, reflecting the fact that most shops were forced to shut down due to the COVID-19 pandemic.
Supermarkets were allowed to stay open throughout lockdowns and enjoyed soaring sales. Many have since paid large dividends to shareholders. Public pressure for supermarkets to give up the tax relief has been growing in recent weeks, given their strong performance.
Lidl’s announcement means supermarkets and retailers have now pledged to pay around £1.9bn into the government’s coffers this week alone.
“We feel confident that the business is well positioned to navigate and adapt to any further challenges brought by COVID-19,” Härtnagel said.
Lidl said it plans to invest £1.3bn in Britain over the next two years. The German discounter hopes to open 100 new stores across the UK and Ireland, creating 4,000 new jobs.
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