The Business rates disaster
by Rodney Atkinson
Business rates are destroying the High Street and the savings of decent people who have invested in their local communities.
The main problems are:
1. Rate levels (which have continued to rise throughout the 5 year recession) and rates revaluations bear no relation to retail market reality. Revaluation every 5 years is designed purely to ” ensure bills paid by any one ratepayer reflect changes over time in the value of their property relative to others”. THIS IS A DANGEROUS FARCE, almost designed to destroy the rates payer. The 2015 revaluation, which might at least have rebalanced rate levels between rich and poor, north and south and intown and out of town, has even been postponed – ostensibly to produce “stability”. Instead it is bringing economic destruction to many retailers and excessive profits to others.
2. The reduction from 12 months to 3 months in the rate allowance for empty properties is causing the demolition of factories. Such an escape is not open to Landlords of retail property. he cannot tear down a high street shop. Landlords are forced to pay business rates on assets where no business is being carried out. They are forced to pay a tax on assets which have negative income. On no other asset class and on no other profession is such a crippling and unjust burden placed.
3.The NIL rates paid by charities is made up by higher rates on commercial shops (who also unlike charity shops don’t rely on cheap or volunteer labour). In several towns, as commercial rates have driven out shop keepers and landlords the only buyers are the Charities, subsidised by the taxes of those they have helped to drive out!
4. Even if there had been no recession Business Rates longer reflect the reality of the High Street whose business has been subsidised away by Councils and central government to retail parks, where parking is free, where roads have been provided, where planning has been very accommodating and where rates do not reflect the distorted balance between in town and out of town shopping.
5. Nothing is so unbalanced in retail as the contrast between the online retailer and the high street shop. Either the extremely profitable (and often tax avoding) online retailers must share the burden of business rates or business rates should be abolished.
These factors, combined with a collapse in retail demand as Government creams off disposable income to reduce its debt, are daily wiping out thousands of retailers, investors and – through pension funds – pensions.
The Government must act without delay.
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