One casualty of the snap general election called by British PM Theresa May, unexpectedly called last week, will be a package of relief proposed by the government in the light of criticism from SMEs facing eye-watering business rate hikes as of April 1 2017. We wrote about the problem earlier in the year.
Such was the clamour from SMEs that the government offered some relief in the 2017 UK Budget. One part of that was a pot of cash to help pubs in particular, but also other small businesses facing rate rises. The proposal went out for consultation but the government has yet to respond to that and now it will fall to the next government (widely expected to be another majority Conservative administration led by Mrs May) to implement the relief. It doesn’t seem unlikely to suggest that the fund will be lost altogether though.
The particular irony of the business rate hikes is that they hit small and independent businesses with city centre and High Street premises hardest because the rate reflects rents. And those prime positions have seen significant rent increases in the past few years. And yet, as some have pointed out, one of the winners is Amazon.
Bigger premises, in out of town locations, haven’t been subject to similar rent hikes recently. And that means a company such as Amazon isn’t seeing similar increases despite having huge premises around the country. The unexpected aspect of that is that whilst maintaining a distinct and vibrant High Street with exciting shops should be a priority, Amazon “the High Street killer” is laughing all the way to the bank.
Tamebay thinks that the death of this small pot of relief won’t matter a great deal. Rather business tax policy should be framed more sympathetically to assist small concerns and emerging businesses. In short, as it stands, the business rates regime is broken.
