Supermarket ‘windfall tax’ being considered by governments

A proposal for a one-off windfall tax on the profits of large supermarkets is being considered by Scottish and UK governments, it has been revealed.

The suggestion, made by the Scottish Green sin April, has been taken up by the Scottish Government, which is now in discussions with the UK government over the introduction of a tax on the retailers’ “excessive profits”.

On Wednesday, Tesco and Morrisons announced they would voluntarily re pay £850 million of business rates relief received from the UK government as part of the Covid response by the Treasury. Yesterday, Asda said it would return £350m, as Aldi and Sainsbur y also said they would repay millions in relief.

The announcements came after criticism that supermarkets had benefited from taxpayer support while enjoying a surge in sales.

Raising the issue in Holyrood, Green MS P Mark Ruskell said: “It’s clear that the gap between small retail businesses and giant corpo - rations is widening because of this pandemic, which will have a devastating impact on our already struggling high streets.

“Tesco has shown that companies who have made astronomical profits from Covid have a duty to pay back sup - port funding, but a voluntary approach alone won’t save our smaller businesses.

“What discussions will the Scottish Government have with the UK government on the possibility of an additional windfall tax through the corporation tax scheme?”

Public finance minister Ben McPherson said while the Scottish Government was “restricted by the devolution settlement in making changes to taxation”, it was “engaged with the UK government”.

He said: “That would require either permission from the Treasury if the Scottish Government was to have locus over the determination of such a tax, or to be delivered by the UK government .”

A windfall tax was used by the Labour government in 1997 on the “excess profits of the privatised utilities”.

Mr Rusk ell said: “I’m very pleased that the Scottish Government has decided to take the idea of a windfall tax forward in discussions with the UK Government.”