High Street Businesses Struggle, while Online Retailers Prosper
The Local Government Association (LGA) has argued the unfairness of small shops paying business rates while competing internet retailers continue to pay nothing.
If local councils had the ability to set rates locally and retain all income instead of the current 50%, they would be able to help local suppliers, offering relief where needed and encouraging new business.
Business rates should reflect their local areas and not be forced to operate to a fixed formula via Whitehall.
Under the proposed overhaul, business rate charges would be cut for retailers that residents wanted in their high streets, offering new businesses the option of start-up leases.
At present almost one in seven high street shops are empty and the current rates do nothing to promote new businesses opening.
We need a taxation system that is fair for the 21st century; the current system is failing to do this! We need to support areas where companies operate rather than hindering them! Unfortunately this is exactly what the current system is doing!
Northern Ireland Re-Evaluates Non-Domestic Rates
Under the new assessment the re-evaluation will seek to re-distribute who pays what rather than increase the revenue generated from the rates.
Some businesses’ could see their bills cut in half while others could face huge increases! At least one pub in seven are looking at a seven fold rise in its bills while provider NIE is looking to be hit with a significant rise after it infrastructure was valued much higher than the last time it was valued.
This was last undertaken in 2003 based on the property prices of the 2001 market. The new system should reflect a much-needed re-balancing of the system.
The draft re-evaluation which is still subject to change, will result in around 49% of non-domestic properties commanding lower rates and 51% subject to increase. These changes should reflect the changes in how and where people shop, work and socialise since 2003.
This will see large supermarkets on the outskirts of towns seeing significant increases in their bills whilst smaller rental outlets within the city and town centres that may not be as popular seeing their rates burden eased.
The final values will only be set once the Northern Ireland Executive and district council strike their agreed rates for the forthcoming financial year. The new values will be used to calculate business rate bills from 1 April 2015.
Business Rates increasing faster than council tax and fuel duty.
According to new analysis, the amount being paid in business rates is growing at almost the same level as council tax and fuel duty combines.
The Office of Budget responsibility (OBR) state that the amount generated from the rates will soon surpass council tax and fuel duty in the 2015/2016 financial year.
According to the OBR business rates will increase by 41pc, or £9.4bn, to generate £32.3bn for the treasury. This compares to a 21pc, or £5.2bn, increase in fuel duty and a 26.6pc, or £6.4bn, increase in council tax.
Retailers are calling on George Osborne to extend the period of relief measures he put in place in last year’s autumn statement. This package included capping the annual inflation-linked increase in business rates at 2pc and offered a £1,000 discount to small businesses.
Strong hints suggesting some relief on rates in the Autumn Statement
The chancellor is hinting that the Government may provide some relief on the rates burden in the upcoming December statement, though small business leaders are questioning if it will go far enough.
The Rates reform is the most common issue that has been submitted either to the chancellor or the way of the Treasury.
The pickup in the economy has benefited small businesses, however with an election close by, key figures in the sector have come up against difficulties in finalising a shopping list. With an outlook of a brake up in the coalition and election uncertainties resulting in unfinished business, an “election budget” may be risked.
The federation of small businesses wants an “aspirational” Autumn Statement that encourages businesses to grow and create employment.
Phil Orford, chief executive wants to look at “the true cost of small business inflation” He has urged the Chancellor to give priority to a short-term action programme to ease the cost pressures.
The Centre of Entrepreneurs wants the Chancellor to look at incentives for big firms which will unlock their balance sheet and draw on the £488bn sitting in them to invest in small and medium-sized businesses through corporate venturing.