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?