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Pets at Home becomes latest UK retailer to hand back COVID-19 tax relief

Pets at Home became the latest British retailer to hand back the tax relief it received from the government during the coronavirus crisis, as the pet supplies firm said on Friday it would repay the entire 28.9 million pounds ($38.91 million).

“We were very grateful for the rates relief provided back in March during a time of significant uncertainty that helped us take the decision to keep our stores, online operations and veterinary practices open,” Chief Executive Peter Pritchard said.

“Recent positive news around the launch of vaccinations for COVID-19 has led us to reassess the level of uncertainty ahead.” 

The move follows in the footsteps of major companies including Sainsbury’s, Tesco and Morrisons . As of Thursday, the total repayment proposed by retailers on the so-called business rate reliefs stood at 1.8 billion pounds.

Pets at Home, which runs 453 retail stores, is by far the smallest of the lot with a market value of 1.98 billion pounds.

The Big Four supermarkets in the UK - Tesco, Asda, Sainsbury’s and Morrisons - have benefited from a sharp rise in grocery sales as Britons stockpiled during the virus lockdowns and have been able to keep their dividends intact.

That led to criticism from lawmakers and media for taking tax relief, eventually prompting the companies to return the money.

Last month, Pets At Home declared an interim dividend per share of 2.5 pence and reported upbeat revenue growth on strong demand for its accessories and veterinary services.

The British company said the financial impact of the pandemic - currently estimated at over 35 million pounds this year - can no longer be offset by government relief.

Shares of the company, which have soared 42.4% so far this year, were down 0.5% in early trade.

($1 = 0.7428 pounds)