Business Revival Property Aspects Banner

Are Business Rates a Burden For Retailers?

Are Business Rates a Burden For Retailers?

The burden of business rates has been highlighted again by the closure of a family pet shop in Middlesbrough.

With high street shops under ever-increasing pressure, might it be time to re-think how business rates are levied?

Weighed down by an annual tax bill of £6,476, Middlesbrough’s In Town Pet Shops was forced to close its doors after many years of town centre trading.  It’s far from an uncommon sight, with 14% of UK retail premises now standing vacant, and many businesses citing high taxes as a major barrier to success.

Kevin Coleman, owner of the pet shop at the centre of the controversy, plastered the frontage of his shop with posters decrying his tax bill.

But, with business rates decided by central government, councils often have their hands tied.  Is it time for a change in thinking?

Property Aspects Magazine spoke with Paul Giness of The Beattie Partnership, one of the UK’s leading Business Rate experts:

“If you run a small business then your margins can be tiny. On many occasions we have managed to reduce business rates liabilities for our clients and in some cases we have removed their rates liability completely. For many of our clients, rate relief has made a tremendous difference.  It’s been a great weight off their minds.”

Currently, business rates are linked directly to the hypothetical rent of retail property from 2008.  Therefore Middlesbrough Council like many other councils across the UK understand there is some frustration that their hands are tied on the matter.

There are signs that the national situation may be under review, however.  Throughout much of the current revaluation the government has enhanced the current Rate Relief scheme to help small retailers survive. In addition following the Localism Act, authorities now have more powers to help rejuvenate the high street to fight the lure of out-of-town chain stores.

It is certainly worth ratepayers looking up what they may be entitled to, as there are multiple initiatives in place to help retailers that have already benefitted thousands of small businesses. Paul says “assuming the rateable value is correct there are still lots of reliefs available to help retailers.

The British Retail Consortium recently suggested lifting buildings with a rateable value of less than £12,000 out of the need to pay the tax at all.  As a reply to a wider consultation on business taxes, the idea has been welcomed by many.

But, despite ongoing consultations on the place of Business Rates as a means of income for the Treasury, it seems unlikely that big changes are in the immediate pipeline.  There is hope, however, that central government is becoming increasingly aware of the pressures felt by high street traders.  And, with a general election looming, more olive branches may be offered to our struggling high streets.

Sadly, such changes come too late for In-town Pet Shops.