Garden centre group 'angered' by Jersey retail tax
Blue Diamond, which owns St Peter’s Garden Centre, has said the tax on retailer profits in the Island is ‘discriminatory’ and will deter investment in the Island.
The company, which is headquartered in Guernsey, announced an increase of 18% in profits before tax across the group in 2018, but in a year when it was forced to incur a significant write-down in the value of a retail property it co-owns in St Helier and had to pay additional taxes.
In its annual report, chairman Simon Burke criticised the decision to tax large retailers and said: ‘This is a discriminatory and retrograde levy, targeting a sector which in general needs support, rather than undermining, from governments.’
To highlight the plight of the sector, it was forced to declare a write-down on 37 Queen Street, a retail outlet it co-owns through an associate company. The unit is now estimated to be worth £600,000 less than what was paid for it when purchased in 1998, with Blue Diamond incurring a £300,000 write-down for its 50% stake.
The write-down in the Queen Street property is due to the sharp fall in rental yield for retail properties due to declining high street sales.
Richard Hemans, Blue Diamond group finance director and company secretary, said the new 20% large-retailer tax has ‘angered’ the company.
‘Last year we bought 11 garden centres in the UK and grew quite significantly,’ he said. ‘Next year in the UK we will be paying less corporation tax because it goes down to 17%. Plus there are lots of incentives to invest there.
‘Next year if you spend £1million on investing and refurbishing your business in the UK, you will get £190,000 back in tax. Jersey is making itself very uncompetitive for retailers.
‘We value our business in the Island very much and we’re very proud of it. We spent a million pounds in 2017 refurbishing St Peter’s.
‘I don’t think we would have done that level of investment if we knew then what we know now.’
However, Mr Hemans added that the Group would continue to invest in St Peter’s to meet customer needs and expectations. The garden centre also employs around 130 people. In 2018 it paid £0.4million of additional taxes in Jersey as a result of the retail profits tax.