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Government Starts To Cannibalise Its Host.

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Government starts to cannibalise its host.

I just got a rates bill for a small outlet I run. Not very profitable but it keeps two people in work and pays circa £15k in VAT and about £5k in other taxes. (not to mention those two people would likely be unemployed and on the dole rather than earning a wage and paying tax themselves)

It has been exempt from rates for well as long as the unit has been there. It is absolutely tiny at about 5-6 square meters. Today I get a letter saying the council is now going to charge rates on it at a cool £4,000 or so per square meter!!! Rateable value apparently £20,000 which means they want some £8-9k more out of me.

Well no thanks it isn’t worth the hassle and I would be making a loss.

I am quite pissed off with this, not just for the loss of some small income but for the retardedness of the situation. This £8-9k they are trying to squeeze out of me will likely cost them £40k in lost taxes and benefit payments.

Before any smart **** says someone else will lease the unit and pay the taxes, not likely, there is already two similar empty units nearby. Plus many more on most high streets.

Will be calling them today and if they don’t reduce it 80-90% will pack up and leave within a week or two.

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Government starts to cannibalise its host.

I just got a rates bill for a small outlet I run. Not very profitable but it keeps two people in work and pays circa £15k in VAT and about £5k in other taxes. (not to mention those two people would likely be unemployed and on the dole rather than earning a wage and paying tax themselves)

It has been exempt from rates for well as long as the unit has been there. It is absolutely tiny at about 5-6 square meters. Today I get a letter saying the council is now going to charge rates on it at a cool £4,000 or so per square meter!!! Rateable value apparently £20,000 which means they want some £8-9k more out of me.

Well no thanks it isn’t worth the hassle and I would be making a loss.

I am quite pissed off with this, not just for the loss of some small income but for the retardedness of the situation. This £8-9k they are trying to squeeze out of me will likely cost them £40k in lost taxes and benefit payments.

Before any smart **** says someone else will lease the unit and pay the taxes, not likely, there is already two similar empty units nearby. Plus many more on most high streets.

Will be calling them today and if they don’t reduce it 80-90% will pack up and leave within a week or two.

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Happend with my old work place.

There are tons of anedotals flying around in the accountantcy industry about this where all the creditors are willing to wait a bit longer for their unpaid bills.

HMRC however are not and force liquidations of companies to get their tax paid, which is stupid as what happens next year?

Reminds me of the end of the Ming dynasty in China whereby taxes were levied so high and money was printed so quickly people downed tools and became beggars instead as it afforded them a better life style.

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Government starts to cannibalise its host.

I just got a rates bill for a small outlet I run. Not very profitable but it keeps two people in work and pays circa £15k in VAT and about £5k in other taxes. (not to mention those two people would likely be unemployed and on the dole rather than earning a wage and paying tax themselves)

What a terrible boss, depriving two people a publicly funded home and government spending money by giving the poor sods jobs! wink.gif

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Will be calling them today and if they don't reduce it 80-90% will pack up and leave within a week or two.

Probably worth a trip to your local MPs 'surgery' open day, and a letter to George.

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Aah the beloved business rates. <_< Ours work out at £2k pa per employee, ask the council what you will receive for the £8/9k pa they wish to extort from you. <_<

Edited by Concrete Jungle

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Aah the beloved business rates. <_< Ours work out at £2k pa per employee, ask the council what you will receive for the £8/9k pa they wish to extort from you. <_<

Don't blame the council, they don't set the rate and they don't get to keep the money raised. They collect it on behalf of central government and pass all the money back to HM Treasury. The council only gets to keep domestic rates, ie, council tax.

This was a change introduced very quietly when the Thatcher poll tax was invented. Previously councils set and kept business rates and they were a lot more affordable back then.

Edited by Nationalist

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Reminds me of the end of the Ming dynasty in China whereby taxes were levied so high and money was printed so quickly people downed tools and became beggars instead as it afforded them a better life style.

Wow! That is something I never thought about, do you have any recommended reading on the subject?

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Speak to the valuations office for a re-assesment. There are also companies out there who specialise in winning re-assesments - As long as the rateable value is less than £18k per annum, you will qualify for small business rates relief of 50%.

It's totally wrong though isn't it? I've been trying to find around 2000 sq ft of office space and they all apear to have a rateable value of £18k+ handy for the councils. If it's got a rateable value of £17,999 I pay, say £4500k, if its £18,000 I pay £9k!!

if rates were set in the boom years, It's time they were reset based on what the economy is like now.

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Don't blame the council, they don't set the rate and they don't get to keep the money raised. They collect it on behalf of central government and pass all the money back to HM Treasury. The council only gets to keep domestic rates, ie, council tax.

This was a change introduced very quietly when the Thatcher poll tax was invented. Previously councils set and kept business rates and they were a lot more affordable back then.

Hadn't realised that, but it's all of a piece. The change from rates to poll tax cut the tax paid on housing enormously, particularly that paid of bigger houses. It was always a completely stupid idea that trashed the tax base. If we'd stuck with the rates system it would have acted as a massive dampener on HPI and encouraged old people to downsize. So at the same time taxation was quietly transferred from housing to business. The Thatcher cheerleaders only remember how much better of the already well-off became when poll tax replaced rates and then when council tax, which is far less progressive than the old rates system, replaced the poll tax. She bought votes by hollowing out the tax base, much like Gordon Brown - and the boom she engineered ran into a massive bust when millions had their homes repoed or ended up in negative equity for years. Happy days under Conservative governments. Of course it's different this time as the Lib Dems are in there as well. (And I'm not a Labour supporter either - Brown was just as sh!te, only in a different way.)

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I am seeing small shop units and industrial units all over the place up for rent - even in suburbs which are considered quite prosperous and they are standing empty for months on end... only for more to join them.

I suspect you are not alone amongst such business owners who are pulling the plug now and getting out.

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Sorry to hear about that Cells, it's a real kick in the nuts when your trying to create and produce for the economy and your targeted for a shakedown.This is why I won't set up a business, too many parasites bleeding the host dry. I'm keeping my capital locked away until the parasites have been starved into submission.

It's all about Sticky Prices. The rates set in the boom, affordable by people that were among the first to receive the new credit money benefited tradesmen like kitchen fitters, double glazing firms, flooring, carpet fitters, hair dressers etc.. they all pushed up the cost of rates and the cash led to a rapid growth of non productive state jobs dependent on those rates.

Edited by enrieb

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Hadn't realised that, but it's all of a piece. The change from rates to poll tax cut the tax paid on housing enormously, particularly that paid of bigger houses. It was always a completely stupid idea that trashed the tax base. If we'd stuck with the rates system it would have acted as a massive dampener on HPI and encouraged old people to downsize. So at the same time taxation was quietly transferred from housing to business. The Thatcher cheerleaders only remember how much better of the already well-off became when poll tax replaced rates and then when council tax, which is far less progressive than the old rates system, replaced the poll tax. She bought votes by hollowing out the tax base, much like Gordon Brown - and the boom she engineered ran into a massive bust when millions had their homes repoed or ended up in negative equity for years. Happy days under Conservative governments. Of course it's different this time as the Lib Dems are in there as well. (And I'm not a Labour supporter either - Brown was just as sh!te, only in a different way.)

In fact when the council tax replced the poll tax we ended up paying a lot more. 2 people, 1 bedroom flat.

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The sheer stupidity of this is staggering.

Your business is quite isn't viable as a going concern when you factor in all the taxes you need to pay to run a business.

Can you move elsewhere with zero or lower business rates?

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In fact when the council tax replced the poll tax we ended up paying a lot more. 2 people, 1 bedroom flat.

On average the council tax was less progressive than the rates system because council tax has a fixed relation between bands with an effective cap on the top band (IIRC it was around £300k based on valuations ca 1990). The poll tax is profoundly regressive. Your situation is pretty unusual as most people in your circumstances would have paid less under council tax than poll tax for two-person occupancy of a one-bed flat, unless it's a big one-bedder somewhere like Sloane Square.

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It is absolutely tiny at about 5-6 square meters.

Wow, you can fit two staff and yourself into 5-6 square metres and still run a business. Considered being a BTL landlord for HMO's?

I get offered contract work but by the time the taxes are taken out and the hassle dealing with the taxforms as self-employed, its just not worth the trouble.

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.. not forgetting the fact that the freeholder will be paying 50% of non-domestic rates after three months of the property being vacant,

hence, there are a lot of very desperate over leveraged commercial property owners out there

apart from the ones that saw this coming years ago - ;)

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Guest sillybear2

At least you'll get a nice warm feeling inside when you know your new 'enhanced' business rates are going to subsidize second home owners preferential CGT rates.

You obviously made some bad investment decisions, namely running a business and employing people, everyone knows the only way to go is to pour your money into a pile of highly productive bricks.

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In fact when the council tax replced the poll tax we ended up paying a lot more. 2 people, 1 bedroom flat.

Meanwhile the substantial economic beneficiaries of the value of local services (the owners of lots of real estate) had their tax bills reduced immensly

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Exactly the same happened to a farming friend of mine. He has a barn that has been sublet into little units. Rates exempt, he rents them for not a lot to some local small businesses. So the man shows up, re-evaluates them and demands £26K per annum off him - approximately £10K more than the rent. The tenants can't afford to double their rent, so they leave. The man still demands £26K. So the farmer pulls the roof off with a JCB, and the man is satisfied. Value add all the way.

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Probably worth a trip to your local MPs 'surgery' open day, and a letter to George.

And a letter to your local paper.

Or,just just a draft for now, and take it to the meeting with your local tax people. Show the draft to them, and ask them if you will have to post it or not.

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Exactly the same happened to a farming friend of mine. He has a barn that has been sublet into little units. Rates exempt, he rents them for not a lot to some local small businesses. So the man shows up, re-evaluates them and demands £26K per annum off him - approximately £10K more than the rent. The tenants can't afford to double their rent, so they leave. The man still demands £26K. So the farmer pulls the roof off with a JCB, and the man is satisfied. Value add all the way.

This is what can happen if you insist on taxing people for what they add rather than what they are empowered to take from others. This tragedy is repeated again and again silently and almost unnoticed, whenever potential wealth creation is rendered unviable by the extra taxation that would fall on it.

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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