How will you be affected by UK Business Rate Changes?

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Much has been written about changes to UK Business Rates. But what is the story? And how does it apply to UK marketplace online sellers?

As it stands, property taxes on businesses with premises in many parts of the UK are going up. That’s especially true in the South East and London. Currently, the UK is seeing the biggest review and revision of business rates for business premises for a decade.

The new business rates will be calculated as a percentage of potential rental revenue (or “ratable value”) and such rates and thresholds haven’t been adjusted in nearly 10 years. The failure to raise or adjust rates over time is a problem and now many outlets will suffer terrible rises, not least if they exist in affluent areas.

The new system also means that small and independent shops renting in town centres will often pay a greater percentage but multi-nationals like Amazon operating in more suburban areas will pay the same or less per square foot than before. By basing the new rates on property value essentially, online players like Amazon, who aren’t on the High Street, do seem to be getting a better deal.

As campaigners have pointed out, isn’t this a retrograde step against the High Street? Bricks and Mortar traders are already struggling and this represents a a kick in the teeth to shopfront businesses. Especially those small and independent traders that add character to our shopping streets. And it’s not just shops: it’s pubs and restaurants which will be impacted by the changes too.

Business Rates are a crude and illogical organised fundraiser for the Exchequer in any case. But to further penalise smaller operations, independent traders and indie shops is surely bizarre? Government policy should surely benefit SMEs in the first instance. Chains, multi-nationals and big concerns already have the resources to game any changes or regulation.

Needless to say, there are protests against the changes. This one focuses on what they perceive to be a tax cut for Amazon. It’s called: Don’t give Amazon a tax break. At time of writing it has 85k signatories. As the blurb says: “38 Degrees members believe that tax is important – it pays for our NHS, education for everyone and a safety net for those who need it. But the government’s new tax rules just don’t make sense – they’re based on the location of businesses rather than how big they are.”

Of course, many Tamebay readers do own and run premises. Some will be on High Streets and others will be out of town. The average ecommerce firm doesn’t need to be on the main drag, after all. Let us know how you will be impacted. And also tell us what you think of the changes?

7 Responses

  1. I own a shop in a busy market town in Essex, the arcade that i am in has 1 office and 6 shops. Only 2 pay rates because the rateable value has to be over £12,000.

  2. Why is it that retailers are happy to outbid each other on High Street Rentals but scream ‘unfair’ when the rates for those same premises are directly related to the exorbitant rents that they themselves have pushed up by offering the landlords more and more for prime spots?
    If they don’t want to pay high rates, let them take cheaper premises in secondary positions? or would that hit their profits too hard?
    Perhaps they would like to move to cheap warehouse units and see how easy (not) it is to make money purely on line with wafer thin margins.

  3. I have a small shop in an out of town area in Tibshelf in the Midlands. No footfall out in the sticks. My business rates have increased from nothing last year to £1400 this year. I don’t mind paying I was going to take another person on this year so I’ve shelved that idea and I’m also laying off another member of staff to pay for the rate increase. My shop is next to a business centre in which 2 businesses will be closing down due to massive rate increases. The goverment did say that in the Midlands people would pay less in business rates however I consider this to be just a myth.

  4. @ Paul Woodings. It may be worth seeing if you can get the rateable value lowered, if you get it under 12k then the rates would be free again if this is you only shop. regards.

  5. Our shop is presently located on the High Street, which in Aldershot is a secondary location.

    Our business rates will go up 70% come April, whilst the main shopping street, the one with the multiples located in, will see their rates decrease.

    i say presently, as we will be closing down at the end of the week to move into a warehouse and concentrate on online only.

    The decision is based on a multiple of reasons, decreasing footfall, the rates rise, we are at capacity size wise and most importantly, as i own the building, another business wants my shop due to its location being directly opposite a doctors surgery.

    Business rates has the highest “Collection Rate” for the government compared to other taxes, also, local councils will be able to keep the rates instead of it going to central government, which also means that local councils will be able to offer “incentives” to retailers to get them to come into their area.

    I wonder which types of businesses will be able to take advantage of this.


  6. I have a small business outskirts of Nottingham. No small business rates recognition due to measuring anomalies and VT tribunals are fixed in circumstances like mine as panel members told never to depart from RICS guidance. That’s from the horses mouth.

    Time for me to close up altogether

  7. Tenanted Landlord of a one room pub on the outskirts of a market town in the North of England, as l am tied l am able to shop around to negotiate the best price for my wares.Wet salees only as we have no catering. Kitchen
    My rent excluding VATis almost £50,000 per annum.
    I now face a 96 percent rise to Business Rate from £23,000 to £45,000
    I am mounting an appeal.
    My rent went up ,wholesale cost rose in January and the staff will get a pay rise in April they were already receiving above the living wage when it was introduced.
    Yet customers had their annual grumble when beer went up by 10p
    Gonna need a lot of extra 10ps to break even with last years profit.
    Think l will go drown my sorrows


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