Business Rates - Fair or Unfair

[Leithen]

singlecoil said:

Leithen said:

Chrisgr31 said:

If you and others werent paying business rates the government would have to raise the 26 billion it raises from somewhere else, so how are you proposing it should be raised? Preferably as efficiently which will be difficult as the business rates are a very efficient tax.

If reduced rates encourages businesses to occupy, invest, employ and sell, then additional PAYE, NI and VAT may well bring in more revenue for the exchequer. I'd go further and encourage greater grant availability or other tax holidays for small businesses starting out.

Who says reduced rates would do that? It rents that need to be reduced, rates will follow.

Rates and grants and perhaps to a lesser extent planning restrictions are some of the few ways that Government can directly encourage occupancy. Equally if rents are remaining artificially high, perhaps removal of any empty property relief might encourage owners to drop them?

[singlecoil]

Leithen said:

Rates and grants and perhaps to a lesser extent planning restrictions are some of the few ways that Government can directly encourage occupancy. Equally if rents are remaining artificially high, perhaps removal of any empty property relief might encourage owners to drop them?

https://www.gov.uk/apply-for-business-rate-relief/exempted-buildings-and-empty-buildings-relief

Empty properties
You don’t have to pay business rates on empty buildings for 3 months. After this time, most businesses must pay full business rates.

Some properties can get extended empty property relief:

industrial premises (eg warehouses) are exempt for a further 3 months
listed buildings - until they’re reoccupied
buildings with a rateable value under £2,600 - until they’re reoccupied
properties owned by charities - only if the property’s next use will be mostly for charitable purposes
community amateur sports clubs buildings - only if the next use will be mostly as a sports club

[fridaypassion]

singlecoil said:

Thanks for the extra info. It doesn't answer my point, not that you need to if you don't want to. But it gives me the opportunity to repeat that the only reason for not hiring staff is that you don't have enough work for them, not rates.

I had a look at where your unit is and I can see why your rates bill is low. Fortunately it doesn't matter with your specialist business, but a normal garage would want to be a lot more visible and they would need to pay more rent (and therefore rates) to achieve that.

And would that process help or hinder them hiring staff? I think you'll find in our area a roadside automotive premises will equate to a blokes wages in business rates. So you are suggesting that if a garage has work building up to a point where they can expand its right that they have to hold back until they can waste money on business rates? I understand you are trying to make a conceited point that if you cant afford the rates dont do the business etc but thats complete horsest. When businesses are growing cashflow is critical and having £1000 flushed down the toilet every month is regressive and does hold businesses back. Did you take over a family business or something? You cant be an entrepreneur with your thinking surely!?

[Wombat3]

fridaypassion said:

singlecoil said:

Thanks for the extra info. It doesn't answer my point, not that you need to if you don't want to. But it gives me the opportunity to repeat that the only reason for not hiring staff is that you don't have enough work for them, not rates.

I had a look at where your unit is and I can see why your rates bill is low. Fortunately it doesn't matter with your specialist business, but a normal garage would want to be a lot more visible and they would need to pay more rent (and therefore rates) to achieve that.

And would that process help or hinder them hiring staff? I think you'll find in our area a roadside automotive premises will equate to a blokes wages in business rates. So you are suggesting that if a garage has work building up to a point where they can expand its right that they have to hold back until they can waste money on business rates? I understand you are trying to make a conceited point that if you cant afford the rates dont do the business etc but thats complete horsest. When businesses are growing cashflow is critical and having £1000 flushed down the toilet every month is regressive and does hold businesses back. Did you take over a family business or something? You cant be an entrepreneur with your thinking surely!?

+1 , business rates do nothing to help business & cause most problems for the businesses that can least afford them - i.e. start-ups or growing businesses.

In addition to this, the supposed link between rates and rents also creates a situation where businesses who compete with each other may face different tax burdens simply because of where they are based.

People tend to build businesses where they live (perhaps have lived for many years) and not all businesses compete locally. A business may find itself competing with a competitor only 50 miles who is taxed less simply because of where he is located. If business rates are to be a fair system then they should at least simply relate to square footage & not rents. There should be a national scheme where all businesses are taxed on the same basis no matter where they are located.

[fridaypassion]

More interestingly - solutions...

Separate building related corp tax? 0.25% on everyones income tax?

The system is stupid. Again its not my personal situation I'm moaning about. If anything its unfair as we look like we are going to end up with 5000 square feet for no rates at all. A 900 sqft shop round the corner will be paying 5 grand. Its completely silly and something has to give.

[singlecoil]

fridaypassion said:

singlecoil said:

Thanks for the extra info. It doesn't answer my point, not that you need to if you don't want to. But it gives me the opportunity to repeat that the only reason for not hiring staff is that you don't have enough work for them, not rates.

I had a look at where your unit is and I can see why your rates bill is low. Fortunately it doesn't matter with your specialist business, but a normal garage would want to be a lot more visible and they would need to pay more rent (and therefore rates) to achieve that.

And would that process help or hinder them hiring staff? I think you'll find in our area a roadside automotive premises will equate to a blokes wages in business rates. So you are suggesting that if a garage has work building up to a point where they can expand its right that they have to hold back until they can waste money on business rates? I understand you are trying to make a conceited point that if you cant afford the rates dont do the business etc but thats complete horsest. When businesses are growing cashflow is critical and having £1000 flushed down the toilet every month is regressive and does hold businesses back. Did you take over a family business or something? You cant be an entrepreneur with your thinking surely!?

So how much is a bloke's wages in your area then? A quick look on the internet shows that a 4000 sq ft unit in WF6 (for instance) the rates are less than £10k.

I gather that you detest business rates and that's understandable, but personally I wouldn't base my business growth strategy on them. Up to you how you run your business though.

[Wombat3]

singlecoil said:

fridaypassion said:

singlecoil said:

Thanks for the extra info. It doesn't answer my point, not that you need to if you don't want to. But it gives me the opportunity to repeat that the only reason for not hiring staff is that you don't have enough work for them, not rates.

I had a look at where your unit is and I can see why your rates bill is low. Fortunately it doesn't matter with your specialist business, but a normal garage would want to be a lot more visible and they would need to pay more rent (and therefore rates) to achieve that.

And would that process help or hinder them hiring staff? I think you'll find in our area a roadside automotive premises will equate to a blokes wages in business rates. So you are suggesting that if a garage has work building up to a point where they can expand its right that they have to hold back until they can waste money on business rates? I understand you are trying to make a conceited point that if you cant afford the rates dont do the business etc but thats complete horsest. When businesses are growing cashflow is critical and having £1000 flushed down the toilet every month is regressive and does hold businesses back. Did you take over a family business or something? You cant be an entrepreneur with your thinking surely!?

So how much is a bloke's wages in your area then? A quick look on the internet shows that a 4000 sq ft unit in WF6 (for instance) the rates are less than £10k.

I gather that you detest business rates and that's understandable, but personally I wouldn't base my business growth strategy on them. Up to you how you run your business though.

Whereas for 4000 sq ft round here you are going to be looking at a rent of around £45-50K for light industrial/warehouse space & therefore rates of north of £20K. QED, potentially competing businesses getting taxed more based on location. Its one thing to have rents based on market values/locations, but not taxes, they should be the same (or close to it) wherever you are.

[singlecoil]

Wombat3 said:

Whereas for 4000 sq ft round here you are going to be looking at a rent of around £45-50K for light industrial/warehouse space & therefore rates of north of £20K. QED, potentially competing businesses getting taxed more based on location. Its one thing to have rents based on market values/locations, but not taxes, they should be the same (or close to it) wherever you are.

'Around here' doesn't mean much when the profile says 'United Kingdom'.

To base it on anything other that rent would be very unfair. If businesses want to compete and their location doesn't matter it kind of suggests they should move to where everything is cheaper.

[Wombat3]

singlecoil said:

Wombat3 said:

Whereas for 4000 sq ft round here you are going to be looking at a rent of around £45-50K for light industrial/warehouse space & therefore rates of north of £20K. QED, potentially competing businesses getting taxed more based on location. Its one thing to have rents based on market values/locations, but not taxes, they should be the same (or close to it) wherever you are.

'Around here' doesn't mean much when the profile says 'United Kingdom'.

To base it on anything other that rent would be very unfair. If businesses want to compete and their location doesn't matter it kind of suggests they should move to where everything is cheaper.

It doesn't matter where , the point is made. And of course people can just up-sticks and move to relocate a business at will . Kids in schools, family, roots, ties to a local area mean nothing.... obviously.

A tax that varies to this extent based on location is bks.

[fridaypassion]

Its OK wombat I think some of us have a more realistic grasp on things than others!

[singlecoil]

Wombat3 said:

singlecoil said:

Wombat3 said:

Whereas for 4000 sq ft round here you are going to be looking at a rent of around £45-50K for light industrial/warehouse space & therefore rates of north of £20K. QED, potentially competing businesses getting taxed more based on location. Its one thing to have rents based on market values/locations, but not taxes, they should be the same (or close to it) wherever you are.

'Around here' doesn't mean much when the profile says 'United Kingdom'.

To base it on anything other that rent would be very unfair. If businesses want to compete and their location doesn't matter it kind of suggests they should move to where everything is cheaper.

It doesn't matter where , the point is made. And of course people can just up-sticks and move to relocate a business at will . Kids in schools, family, roots, ties to a local area mean nothing.... obviously.

A tax that varies to this extent based on location is bks.

Well one might have to have some sympathy for a person who didn't know what the business rates on his intended premises were before he set up the business, but that would be misplaced sympathy because rates are not secret.

I'm amused at your idea that a 3,000 sq ft shop on Oxford Street should be the same rates as a 3,000 sq ft shop in a depressed area in Newcastle. Not impressed, just amused

[fridaypassion]

Why though? The rent should dictate the market value of a premises. The council or government have no place in dictating market values of anything. Is VAT charged at a different rate in Newcastle and Oxford Street?

[Wombat3]

singlecoil said:

I'm amused at your idea that a 3,000 sq ft shop on Oxford Street should be the same rates as a 3,000 sq ft shop in a depressed area in Newcastle. Not impressed, just amused

Should that apply to corporation or income tax rates then as well?

[singlecoil]

I think you should both have a little think about what you've just said

[Wombat3]

singlecoil said:

I think you should both have a little think about what you've just said

No, I think we are across exactly what's going on. Businesses in the same physical sized space are paying very different levels of tax depending on where they are located. That's not right IMO.

[singlecoil]

Wombat3 said:

singlecoil said:

I think you should both have a little think about what you've just said

No, I think we are across exactly what's going on. Businesses in the same physical sized space are paying very different levels of tax depending on where they are located. That's not right IMO.

So evidently you are ok with the example I gave earlier (shop in streets in VERY different parts of the UK?). You think they should pay the same tax if they are the same size? The location counts for nothing?

[surveyor]

In the old days property value was a fairly good gauge for taxes. Those earning a low would be in expensive premises. Those in a different type of property earning less would be in less expensive...

No different to rent. It was seen as a fair tax - in that it's fairly clear to assess, and fairly hard to defraud....

Other countries have similar taxes - although often assessed on freehold values, and many of these are former British states.

What's rather upset the applecart is the internet - meaning some businesses no longer need the same high street frontage to sell - although it's worth noting that companies like Amazon have some very large warehouses that will carry sizeable assessments.

Postponing the 2015 reval has similarly slowed the assessments catching up with market trends, and the constant changes in rules making it harder to appeal really is not fair.

[Wombat3]

singlecoil said:

Wombat3 said:

singlecoil said:

I think you should both have a little think about what you've just said

No, I think we are across exactly what's going on. Businesses in the same physical sized space are paying very different levels of tax depending on where they are located. That's not right IMO.

So evidently you are ok with the example I gave earlier (shop in streets in VERY different parts of the UK?). You think they should pay the same tax if they are the same size? The location counts for nothing?

When it comes to a tax, no more than it does with income/corporation tax, or VAT or duties on whatever you care to mention, or IPT or energy taxes etc etc etc

[singlecoil]

Wombat3 said:

singlecoil said:

Wombat3 said:

singlecoil said:

I think you should both have a little think about what you've just said

No, I think we are across exactly what's going on. Businesses in the same physical sized space are paying very different levels of tax depending on where they are located. That's not right IMO.

So evidently you are ok with the example I gave earlier (shop in streets in VERY different parts of the UK?). You think they should pay the same tax if they are the same size? The location counts for nothing?

When it comes to a tax, no more than it does with income/corporation tax, or VAT or duties on whatever you care to mention, or IPT or energy taxes etc etc etc

ALL of the taxes you mention depend on value. The Oxford Street location is much more valuable than the Newcastle one. Your point crashes and burns.

[Wombat3]

singlecoil said:

Wombat3 said:

singlecoil said:

Wombat3 said:

singlecoil said:

I think you should both have a little think about what you've just said

No, I think we are across exactly what's going on. Businesses in the same physical sized space are paying very different levels of tax depending on where they are located. That's not right IMO.

So evidently you are ok with the example I gave earlier (shop in streets in VERY different parts of the UK?). You think they should pay the same tax if they are the same size? The location counts for nothing?

When it comes to a tax, no more than it does with income/corporation tax, or VAT or duties on whatever you care to mention, or IPT or energy taxes etc etc etc

ALL of the taxes you mention depend on value. The Oxford Street location is much more valuable than the Newcastle one. Your point crashes and burns.

Garbage, it stands absolutely.

Two businesses consuming the same amount of energy will pay the same amount of tax on that energy. They will pay the same rate of IPT on their insurance premiums.

They will charge their customers the same level of VAT & will pay the same levels of tax. Their employees will pay tax & national insurance at the same rates.

Meanwhile the same two businesses occupying the same amount of physical space will pay different levels of rates (tax) on that space.

Its inconsistent and stupid.