Jump to content
House Price Crash Forum
Sign in to follow this  
The Preacherman

High Business Rates Empty High Streets

Recommended Posts

Business rates for our shop in Rochdale were twice those of Harrods, say boutique owners forced out by £21,000 bill

Read more: http://www.dailymail.co.uk/news/article-2346234/Business-rates-shop-Rochdale-twice-Harrods-say-boutique-owners-forced-21-000-bill.html#ixzz2WwJeOkWa

Whilst the internet, reduced disposable income and high rents are also issues for the High Street rateable values are also contributing to empty shops.

Edited by Silent Dancer

Share this post


Link to post
Share on other sites

Insane.

£21k fixed cost before he sells anything.

Going straight to Gidiot to subsidise London rentiers and large corporates who scam everyone else.

UK is more corrupt than Greece ever was.

Solution is to jettison London/City and their placemen in Westminster. Regions should simply exit the UK.

Share this post


Link to post
Share on other sites

Business rates are an insanely regressive tax. While, this might be masked in a boom, in a stable or shrinking economy, such a regressive tax serves only to destroy small businesses.

The reason rates are liked, is because you can't avoid them - just like VAT; highly regressive, but difficult to avoid.

Make the business rates proportional to the rental value of the property and you've got a much fairer system, but it remains difficult to avoid.

Share this post


Link to post
Share on other sites

Business rates are an insanely regressive tax. While, this might be masked in a boom, in a stable or shrinking economy, such a regressive tax serves only to destroy small businesses.

The reason rates are liked, is because you can't avoid them - just like VAT; highly regressive, but difficult to avoid.

Make the business rates proportional to the rental value of the property and you've got a much fairer system, but it remains difficult to avoid.

it is around 45% of rental value..more or less the way you want it...

Share this post


Link to post
Share on other sites

Business rates are an insanely regressive tax. While, this might be masked in a boom, in a stable or shrinking economy, such a regressive tax serves only to destroy small businesses.

The reason rates are liked, is because you can't avoid them - just like VAT; highly regressive, but difficult to avoid.

Make the business rates proportional to the rental value of the property and you've got a much fairer system, but it remains difficult to avoid.

.....I agree...the self-employed are discouraged to try and do things long-term past any discount period to boost the economy and try create employment because of high rents and rates the sums simply do not add up.....would be working long hours for virtually nothing for themselves, only working for the councils, banks and landlords and providing a community service/need, almost like being a voluntary worker, working for the love of it.....someone I know is not renewing their shop lease...no longer viable to do so. ;)

Share this post


Link to post
Share on other sites
Business rates were introduced in 1988 when the ill-fated poll tax replaced domestic rates. The system is notoriously complicated. It involves the Government’s Valuation Office Agency setting the value of the business based on its rentable worth per square metre.

This is then multiplied by the uniform business rate, an inflation-linked figure set by the Government, to calculate the total bill.

But because the valuation of a premises is based on zones – with the 20ft nearest the front window rated highest, followed by the next 20ft and so on – smaller shops are often disproportionately affected.

Values are set every ten years but the last, in 2010, was calculated using data from April 2008 at the height of the property boom. And the next valuation, which could help businesses in areas where property prices and trade have slumped, has been put back from 2015 to 2017.

Sums up everything that's wrong with our tax systems. They take a simple idea and make it horribly complicated, add in some potential for corruption with the valuations, and they can conveniently move the revaluation further away when values have dropped.

I'd be interested in replacing this with a flat rate land tax based on the properties square footage and leave it at that. Rate to be reviewed with every budget. Simpler, fairer and can't be avoided.

Share this post


Link to post
Share on other sites

If rates went lower, then landlords would be able to increase rents. So, while there are many problems with rates such as how it is calculated, I would rather the government was doing the rent seeking and not some landlord.

Share this post


Link to post
Share on other sites

If rates went lower, then landlords would be able to increase rents. So, while there are many problems with rates such as how it is calculated, I would rather the government was doing the rent seeking and not some landlord.

Indeed. Business rate is just a component of the rent and is a weak form of LVT. If the council doesn't charge it, the Landlord will be able to set higher rents.

The variation of the rates come mainly to - yes - you got it - the planning system as different use classes (Offices, Retail, Professional Services etc) will have different Trading Zone sqf rates (and the location, of course).

Share this post


Link to post
Share on other sites

BS story really.

Shop of that size in a reasonable location, in almost any town, £40-50k pa would have been the going rate probably before the last boom. You would always factor in approximately half that pa for business rates.

Shops with a lot of frontage (zone A is the surveying jargon for it) are more prominent and has always been previously assumed it drives more trade ergo this factor is considered when valuing for rent and rates. The reason his rates are more per sqft than Harrods is the amount of zone A frontage relative to the overall floor area of the shop. The effect of Harrods frontage will be offset by the overall vast floor area which will net down the overall average per sqft rates figure.

The reason the shop's are struggling on the High St is simply because there is no longer any trade worth having there. Everything else parking, rates, pedestrianisation etc. are factors but, only exacerbating ones, not the cause. The competition has more choice, is cheaper and more convenient even if you removed all those factors I suspect the High St will still lose on at least two of these.

Share this post


Link to post
Share on other sites

BS story really.

Shop of that size in a reasonable location, in almost any town, £40-50k pa would have been the going rate probably before the last boom. You would always factor in y because there is no longer any trade worth ........having there. Everything else parking, rates, pedestrianisation etc. are factors but, only exacerbating ones, not the cause. The competition has more choice, is cheaper and more convenient even if you removed all those factors I suspect the High St will still lose on at least two of these.

So how do you account for the deluge of Charity shops on The High Street (they have an 80% reduction in their business rates)?

Share this post


Link to post
Share on other sites

So how do you account for the deluge of Charity shops on The High Street (they have an 80% reduction in their business rates)?

They are there because they allow landlords to avoid rates liabilties on empty units. I would expect they're actually outnumbered by post-pre-pack store chains on rent-free deals, or fools with redundancy cheques, these days in providing this service.

Share this post


Link to post
Share on other sites

Purely anecdotal but I've recently noticed a couple of coffee shops on Newcastle's main street go under!! If even coffee shops, and their ridiculously overpriced wares, can't survive then how is any other business managing to keep afloat!!

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 242 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.