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“The Treasury is considering plans to abolish business rates, replacing them with tax on land value and buildings on it".


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“The Treasury is considering plans to abolish business rates, replacing them with tax on land value and buildings on it".

https://www.thetimes.co.uk/article/rishi-sunak-considers-online-sales-tax-in-bid-to-save-high-street-mwncs6dwx

https://t.co/fAyvPJBIoH?amp=1

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“The Treasury is considering plans to abolish business rates, replacing them with a tax on the value of land and the buildings on it.” reports One to watch..

 

Edited by Saving For a Space Ship
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No chance. Waste of mental space even thinking about it. 

Tell the Treasury to stop flying kites and go and do something more useful. 

Eg working out how to keep going in an economy running at 50% for several years. 

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Nice try, but it will still screw town centres and favour out of town business built within cheap warehouse sheds.

Of course there will be 'exemptions' for central London I'm guessing

 

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I think it's inevitable that business rates are dead in the water. No chance of Rishi killing whatever weak recovery we get by bringing back business rates for the low RV properties and supermarkets and the rest will start whining before long. 

Land value tax is interesting. Will property owners just recharge it to tenants though in form of increased rent? Could see that killing the high street stone dead to be honest as landlords look to shift into residential property as commercial tenants run a mile. 

What about local government too? Business rates is a hugely material source of income for councils. Are the government going to collect this tax and pass it on to them as grants or will they leave it up to local authorities themselves? How will it be divvied up? Some areas will bring in vastly more money than others (ditto if a similar scheme comes in to replace council tax).

The only logical conclusion here is that the government will collect centrally and dish out the money weighted according to need (the alternative is that historically Labour stronghold London gets a cash bonanza whilst conservative areas in the sticks starve), which would be ironic as it would completely reverse everything the Tories have tried to do to local government since 2010 (and push it back to the way local government financing was run, successfully, for the best part of a century).

Oh well, what's one more embarassing climb down in a long list for this government, eh? 

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Let's see if this government is doing the right thing. I'll give them the benefit of the doubt. 

Business rates need to go. I am not too sure about LVT for business though. IMO generally LVT should be for residential property. Let's see if they are using Covid as an opportunity to start some topics with a clean sheet. If they get going (like that stupid cheesy patriotic ad) on reforming business to get people to work and increase their productivity, great. I will spend less time thinking about the pathological liar that is our PM

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My business (pre covid) was rated over 1xxk business rates and it worked out 7% of FMT as the valuation.  After an extension the VOA bumped them up with the assumption the extension would be full nearly all year which was silly in the extreme.

If we had a 1/2% annual LVT which reached the same level as the business rates valuation then you would be talking 6.5/7million £ valuation.

So it may be that a land value tax would be less as my business is not anywhere near those figures.

Edited by Fromage Frais
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LVT should be paid by the land owner. No tenant, no income. Low paying income, better than nothing. Charity shops no longer used as a front to avoid rates for landlords of empty shops.

Landlords owning several nearby empty shops will compete on price for a tenant business or sell cheaply. Either is a win. Businesses might be able to buy their own properties. Less hoarding of empty or economically unviable occupancy (sorry charity shops, I love you, but a real shop paying staff instead of volunteers is better).

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If you look at the Treasury document there is barely a page in total on the capital value tax on property owners and the online sales tax. No specifics no detail no clarity - it doesn’t even define how the capital value tax works in California and Brazil.

Making incremental reforms to the existing business rates system gets 30 pages by contrast.

If the Treasury were serious about more radical changes they would have gone into a bit more detail. And they want to conclude the review by next March and it’s all been done internally not via an independent commission. They are also starting work on a revaluation for 2023.

We have had business rates since Elizabeth I who introduced it in 1601 - I seriously doubt they are going to seriously reform it. But a few good headlines gets business off their backs for a few months!

Edited by MARTINX9
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3 hours ago, 24gray24 said:

No chance. Waste of mental space even thinking about it. 

Tell the Treasury to stop flying kites and go and do something more useful. 

Eg working out how to keep going in an economy running at 50% for several years. 

They do this kind of thing to signal that they know what they should be doing, but of course they never do it because they don't like the politics of it. The UK's ratio of good governance to politics is low and has been for some decades.

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49 minutes ago, Dorkins said:

They do this kind of thing to signal that they know what they should be doing, but of course they never do it because they don't like the politics of it. The UK's ratio of good governance to politics is low and has been for some decades.

Yep agreed. Nothing will change

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But now it is more likely to be a tax for online sales and deliveries. Ostensibly to get people to buy in real shops. 99% of what we buy online is not avaliable within 20 miles of where we live.

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2 hours ago, steve99 said:

99% of what we buy online is not avaliable within 20 miles of where we live.

I've been having to buy direct from China lately because much of what I'm buying isn't even readily available in this country.

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Valuing land is difficult.

The problem with LVT is that if you improve land, you are increasing your tax burden. This disincentivises improving land, which will materially slow down production.

It also increases waste, because it is more efficient to group industry and transportation together, yet the land will be cheaper away form transportation hubs, meaning there are perverse incentives to waste resources moving stuff around. This is just one example of increased waste and I am sure you could think of many others.

 

Taxation is slavery, but if you want to have it, it is best to do it in a way which taxes consumption while leaving production alone as much as possible.

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1. You can't change the system unless it's a tax cut for everyone with the new one. That's one of the practicalities. We're not in a position to give tax cuts. 

2. The rich pay far less under this system; so the Tories will never change it. 

3. Rich landowners are the real winners with the current system. It results in all sorts of land being unused but just remaining unproductive because it costs nothing to keep it. With a land tax, it costs money to sit on it, so you sell it to someone who can make more out of it. 

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41 minutes ago, 24gray24 said:

3. Rich landowners are the real winners with the current system. It results in all sorts of land being unused but just remaining unproductive because it costs nothing to keep it. With a land tax, it costs money to sit on it, so you sell it to someone who can make more out of it. 

And why is making land "productive" (which in this case will increase its value and hence tax burden anyway) a good thing? Such a utilitarian view of the world - things are either there to be productive or are being wasted - is damned bleak.

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On 28/07/2020 at 05:06, steve99 said:

But now it is more likely to be a tax for online sales and deliveries. Ostensibly to get people to buy in real shops. 99% of what we buy online is not avaliable within 20 miles of where we live.

I've been reading that there are hints this is what they will do. If it's making sure Amazon and Google pay their fair tax share then brilliant it's a long time coming. Sadly it looks as though they are just looking for an easy tax- I will still order online with a 2% tax increase because I live in the 21st century and I can't get what I want in the charity shops, cafes and pound shops that are in my area. 

This government need to get with the times, they are becoming more and more out of touch with reality by the day. 

A gov should be helping the people move with the times and adapt to changing society not doing everything they can to keep everything the same when it's totally outdated and irrelevant plus massively expensive. Pay for retraining for those on furlough rather than paying them what is effectively an unemployment benefit until right before Xmas and expecting things to be honky dory.  

Shops are the past for a lot of things, no matter what Mike Ashley or debenhams say. Being governed by dinosaurs atm and I'm perplexed how they can keep being so wrong about everything 

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13 minutes ago, kirstieb said:

A gov should be helping the people move with the times and adapt to changing society not doing everything they can to keep everything the same when it's totally outdated and irrelevant plus massively expensive.

"Move with the times" == "accelerate the societally destructive race to the bottom." Beware the sort of world you're trying to build. Still, who gives a sh1t these days if it means they can get hold of more tat without having to shift off their sofa?

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1 hour ago, Riedquat said:

"Move with the times" == "accelerate the societally destructive race to the bottom." Beware the sort of world you're trying to build. Still, who gives a sh1t these days if it means they can get hold of more tat without having to shift off their sofa?

50 cars to one shop vs 1 van to 50 houses- far more efficient. 

It's not a world I want to build it's the world we are actually living in

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13 minutes ago, kirstieb said:

50 cars to one shop vs 1 van to 50 houses- far more efficient. 

It's not a world I want to build it's the world we are actually living in

Somewhat the world we're living in, not entirely yet. And it's a pretty bleak one, at least for anyone who realises there's more to life than a stream of distracting shiny tat and can see society falling to pieces around them. Ah, the wonderful future where we'll never leave our homes or have to interact with another human being. I guess "efficiency" has now joined the pantheon of gods we're supposed to worship above all else, along with "money" and "convenience". A religion that breeds sad, stunted but easily satisfied creatures, although like all religions has its fair share of zealots who love to attack the unbeliever (as long as they can do it without getting off their backsides anyway).

But if the distractions keep you occupied enough to not notice or care lucky you.

Edited by Riedquat
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21 minutes ago, Riedquat said:

Somewhat the world we're living in, not entirely yet. And it's a pretty bleak one, at least for anyone who realises there's more to life than a stream of distracting shiny tat and can see society falling to pieces around them. Ah, the wonderful future where we'll never leave our homes or have to interact with another human being. I guess "efficiency" has now joined the pantheon of gods we're supposed to worship above all else, along with "money" and "convenience". A religion that breeds sad, stunted but easily satisfied creatures, although like all religions has its fair share of zealots who love to attack the unbeliever (as long as they can do it without getting off their backsides anyway).

But if the distractions keep you occupied enough to not notice or care lucky you.

Your mistaken- I do not care for shiny tat and I don't think that is the way forward. Consuming is destroying the planet and putting us into debt. What is happening  is people are ordering more and more online these days and once people change their habits they don't often go back. Adding taxes to subsidise dying highstreets won't help- why not make highstreets easier to access.

People will always buy STUFF, I'm talking about where it comes from. Why do you assume I am defending buying crap as I clearly didn't mention that. 

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I assumed that because it fits in with the "Yay, much better to just sit at home all day!" line you seemed to be pushing towards. I certainly didn't see anything there about making high streets easier to access, not that that's a bad thing at all. Online ordering though, that's pushing consumption, not reducing it. People will always buy stuff, always have, but I really do see online at the forefront (although certainly not as the original cause) of massively increased disposable consumption. It cuts both ways - it's not as if I never buy anything online, both for things I never would've been able to get hold of easily and for things that I no longer can because more and more physical shops are going - it's not a complete negative by any means but on balance I believe it'll cause more harm than good.

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Land is a limited resource. Making an efficient use of it is very important for any society. Currently there is very little incentive for landloards to develop land - it is much easier just hoard in the environment of ever rising proces. Land Value Tax will ensure that there will be a cost from hoarding the land and landlords will be incentivized to release it for society's use so they can make a enough profit to pay the tax.

Unfortunatelly I don't believe that the government will implement these sort of tax in forseeable future. Too many goverment officials and people connected with them are rich landloards owning huge plots of land and multiple houses. They will never agree to the idea to release part of their wealth for society's use.

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  • 415 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% +
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      • Even
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      • up 5%



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