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Government Starts To Cannibalise Its Host.


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When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed.

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AynRand said:

When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed.

so do we do something or do nothing

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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.

Also, council tax is payable by the tenant rather than the landlord. So the property owner who benefits from HPI due to the provision of local services such as made-up roads, street lighting, police, fire brigade, schools, etc., pays less towards those services than the tenant who gets no benefit from HPI.

Edited by CrashConnoisseur
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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.

Used to share an office, previous occupants were a small games software company, 9 square metres with IIRC 12 people. Couldn't believe it myself but no reason to doubt the numbers.

One reason manufacturing and small workshops/fabricators are so screwed is they cannot even begin to have this business density so rent/rates bear heaviest on them. Seems that it is still spreadng up the chain though.

Unlucky Cells.

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The two great perennial lies of British politics are that Labour has the workers interests at heart and that the Tories are the small businessmans friend.

The business rate is great example of the latter fallacy. Introduced in the Thatcher era it has killed thousands of small retailers and businesses yet left the big corporations largely untouched. It is Noticeable that companies like Tescos never whined about this tax until the introduction of small business rate relief in 2005 which required them to pay more. Then Sir Terry Leahy suddenly became very keen on the 2010 rate revaluation being postponed.

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Also, council tax is payable by the tenant rather than the landlord. So the property owner who benefits from HPI due to the provision of local services such as made-up roads, street lighting, police, fire brigade, schools, etc., pays less towards those services than the tenant who gets no benefit from HPI.

Which means real estate owners could free-ride on the back of tenants by forcing them to provide local services, the value of which appeared in rents and hpi

It is a bit like a landlord forcing a tenant to redecorate, then asking for more rent

Given our tax system, it is no wonder at al that we had a real estate boom.

Edited by Stars
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Hi a bit of misinfo going on here. If you would like some advice please let me know. This is an area in which I specialise and I can certainly carry out some preliminary checks for you and advise you accordingly. Maybe pm me and we can do it via email etc.

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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.

Erm, ISTR minimum standards of space per person in the workplace: something like 40 sq ft (just under 4 sq m). That would make putting more than one person into 5-6 sq m illegal.

Is that my memory playing tricks? Or ..... ?

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Erm, ISTR minimum standards of space per person in the workplace: something like 40 sq ft (just under 4 sq m). That would make putting more than one person into 5-6 sq m illegal.

Is that my memory playing tricks? Or ..... ?

Just because something is law doesn't mean it is followed.

Back in 2006 in Ha company in Manchester I worked in we had tiny cubicles which were just big enough for a computer and a chair.

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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.

In theory.

I recollect the reality of the end of rates. My 1-bed flat cost about £650/year in rates, while my colleagues 3 and 4 bed houses in the same area paid between £300 and £350. Under a year later I moved to a 2-bed cottage in a slightly different area (3-4 miles away) whose rates would've been under £100.

That was due to anomalies in rateable values, and they couldn't normally re-rate houses for much the same reasons as they can't revise council tax bands today.

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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,

Really?

ISTR the last budget extended the business rates holiday for property hoarders. Thus distorting the market yet further in favour of landlords over businesses.

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Really?

ISTR the last budget extended the business rates holiday for property hoarders. Thus distorting the market yet further in favour of landlords over businesses.

The holiday was only for properties under a certain amount.

Round here empty warehouses and industrial units have been all torn down to dodge such a tax.

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If you exhaust all other route forward and still want to do the right thing you could just close that business and open a “phoenix” business. That is you close down and then reopen doing the same thing with a similar name just down the road in one of those other units you mentioned.

Just a thought but it is used in all sorts of other industries to avoid various pitfalls.

The best of luck with whatever you decide.

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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.

This story does not surprise me one little bit. I've never understood how people can make small businesses in the "High Street" work given that the rentiers and government do their utmost to take every last bit of one's margin. Problem in your case is that council doesn't get the VAT, and doesn't have to pay social from their budget so they won't see the 40k loss to total government revenue. All they think is, "our budget is a bit tight this year...I know, why don't we just steal off some small businesses?"

Edited by D'oh
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Guest The Relaxation Suite

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.

Why was it exempt from rates? Is this normal for small businesses in little rented units? FWIW I think this stinks and is one of the purest examples yet of how the governments fat **** is choking small business to death. Is this new charging of rates on rented units rolling outacross the whole country or is it a local thing? I know some who runs a small business from a rented unit you see - hence the interest.

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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.

I am very suprised by this. To go from exempt to paying £8-9k seems unbelieveable. Surely there must be small business rates relief and the new exemption that was introduced recently for property below a certain rateable value.

I know busineses renting offices/workshops between 300 to 700 sq ft and paying anything between £500 to £800 in SW London. I think that some property attracts higher rates than others, e.g. workshops are lower than high street shops. And do rates vary from borough to borough? where are you based?

also forgot to say is this the only property that your company rents? as that will obviously vary your rates.

Edited by greengreen
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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 - ;)

Cells, would it not be worth asking the landlord ot pay most of the rates as they will pay 50% if it's empty, as stated above. How did you get away with paying no rates?(i appreciate it's small) surely this is unusual, and paying a small amount is not unreasonable as you've had it free for some time

Is this where you get your hpc username, from running an S & M dungeon ? ;):P

Edited by Saving For a Space Ship
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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.

Hie thee hither that I may pour my spirits in thine ear. Well what has landed on my desk this morning? An instruction to come up with a budget for making some industrial units (that are soon to be empty) exempt from rates. The original desire had been to subdivide and sublet them cheaply to small businesses and start ups, but the moneygrabbers from the government and council appear to have put the kaibosh on that, off with their heads it is. A wonderful example of more joined up thinking from our statist overlords. <_<

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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.

I do so love the words regressive and progressive when applied to taxation.

The poll tax made sense in that every adult paid something towards what local government spent. Due to the fact only part of local government spending was funded by the poll tax any change in local government spending was magnified at the poll tax level, hence showing up high spending authorities. Everyone paid something and the prolifigate councils were shown up. As everyone paid something everyone was liable to get pissed off withe the prolifigate councils. That made sense, except to the lefties.

The effective cap was 300,000 or whatever in 1990 (I don't remember either) but so what? We still have the same bands and the amount charged for each band has gone up. So silly house price inflation has put more nominal house prices way above what was ever envisage, does that mean that the people liveing in those houses are going to use way more services?

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