Business Rates - Fair or Unfair

[chippy348]

singlecoil said:

But remember that the owner has a choice of taking the money the business makes as dividend on the profits or as wages...

But now there are no profits ? + the business model you have given is not viable, you have missed quite a lot of running and maintenance / improvements costs.

I am going to throw the towel in now.

You keep working in your rented workshop on a farm where you pay no business rates and try to keep your business under the vat threshold so you can stay competitive to those that DO pay both business rates and are also vat registered.

People in glass houseses and all that.

[singlecoil]

chippy348 said:

singlecoil said:

But remember that the owner has a choice of taking the money the business makes as dividend on the profits or as wages...

But now there are no profits ? + the business model you have given is not viable, you have missed quite a lot of running and maintenance / improvements costs.

Of course there are no profits, the profit is being taken out in wages. Lots of small businesses do that. Surprised you din't know. Some of the numbers were simplified, it wasn't meant to be a full set of books. It's still a lot more info than you have given.

chippy348 said:

I am going to throw the towel in now.

probably just as well, or otherwise provide the info I've asked for.

chippy348 said:

You keep working in your rented workshop on a farm where you pay no business rates and try to keep your business under the vat threshold so you can stay competitive to those that DO pay both business rates and are also vat registered.

People in glass houses and all that.

I stopped doing that some time ago, although I had a lot of fun, and supplied a number of PHers. The business benefited from zero rates due to the low R.V.

In my next business I will be paying rates, though the amount will be relatively small compared to the turnover (as it is in many average sized high street shops), and will be VAT registered. You'll be welcome to drop in.

[surveyor]

singlecoil said:

surveyor said:

singlecoil said:

surveyor said:

What's the reval RV?

By my calculating the business seems to be making a profit of £2,5k. If those rates double then the extra is gonna end up coming out of the owners wages...

But remember that the owner has a choice of taking the money the business makes as dividend on the profits or as wages...

Which ever way that £7.500 is heading out in a different direction...

It sure is...

If they were to double it again, it would be even more. I guess you will get to your point soon...

I sense you are being obtuse for the sake of it.

My point is there are some people who will have their rates bills doubled overnight come 1st April. To some of these people this will be the make or break of them or their business.

[21TonyK]

surveyor said:

To some of these people this will be the make or break of them or their business.

And just to add "make or break" does not mean there is something fundamentally wrong with their business that the extra rates will mean they are not viable financially.

It may just mean that its no longer financially worthwhile to the owner so they either sell up or close the door.

[fridaypassion]

This is certainly true of a lot of local businesses. For many people its a substitute for employment and not making them rich. The people that are just making do maybe doing something they love doing but not making a killing at it would be buggered by a 7.5k hike in rates.

Anyway I think the OPs original question has been answered. Apart from one fellow in the country its fair to say that the current system of business rates is universally viewed as unfair.

[singlecoil]

surveyor said:

singlecoil said:

surveyor said:

singlecoil said:

surveyor said:

What's the reval RV?

By my calculating the business seems to be making a profit of £2,5k. If those rates double then the extra is gonna end up coming out of the owners wages...

But remember that the owner has a choice of taking the money the business makes as dividend on the profits or as wages...

Which ever way that £7.500 is heading out in a different direction...

It sure is...

If they were to double it again, it would be even more. I guess you will get to your point soon...

I sense you are being obtuse for the sake of it.

My point is there are some people who will have their rates bills doubled overnight come 1st April. To some of these people this will be the make or break of them or their business.

I'm not being obtuse, you've already said about people having their rates doubled and I got that. I just thought you were going somewhere with it.

My point, which leads on from your point, is that to a healthy business rates are an unpleasant fact of life and a cost of doing business. If a business has to close because of the rates then it's not a healthy business. I've given a couple of worked examples of real businesses.

It's all very well to say that some people have had their rates doubled and in many cases it will be because they were previously undervalued, as a previous surveyor pointed out.

For the record, business rates are no more or less fair than all the other taxes we have to pay. How fair was the VAT you paid on the clothes you are wearing? Did you get anything back for it?

We're going around in circles now, aren't we all getting bored of this yet?

Edited by singlecoil on Sunday 12th February 20:13

[MTech535]

Maybe those who are looking at increases should try thinking of it as good fortune that they have been paying lower rates than they should have been for a number of years.

Glass half full and all that.

Regarding rates on empty properties - this is useful for encouraging landlords to reduce rent levels to encourage new tenants and brings the market level for rent down which will lead to reduced rates in future

[surveyor]

MTech535 said:

Maybe those who are looking at increases should try thinking of it as good fortune that they have been paying lower rates than they should have been for a number of years.

Glass half full and all that.

Regarding rates on empty properties - this is useful for encouraging landlords to reduce rent levels to encourage new tenants and brings the market level for rent down which will lead to reduced rates in future

It depends whether the new assessment is accurate or just plain wrong...

As an example.. Hotels are valued on a profits method. The VOA will usually ask the hotel to fill in a form giving details of turnover profit etc...

I know of one where they had some cottages on site. The cottages were assessed for Council Tax, but of course the income from the Cottages was included in the turnover... Double counting at it's best...

Eventually the VOA accepted this argument and the Council List entries were deleted from the list, only for the Charging Authority to fight tooth and nail as they did not want to issue a rather sizeable refund.

While this was not going to make or break this particular business, it is an example of how an assessment can be wrong - yet not be easily addressed.

As a final note. This was dealt with by an experienced specialist who had to fight hard. Imagine if like some say on hear, the ratepayer had just asked the Valuation Officer if the assessment was correct...

[singlecoil]

surveyor said:

Imagine if like some say on here, the ratepayer had just asked the Valuation Officer if the assessment was correct...

Who said that?

[surveyor]

singlecoil said:

surveyor said:

Imagine if like some say on here, the ratepayer had just asked the Valuation Officer if the assessment was correct...

Who said that?

Previous threads SC

[21TonyK]

fridaypassion said:

Apart from one fellow in the country its fair to say that the current system of business rates is universally viewed as unfair.

This is where the thread should have ended. But, one guy who is yet to actually run a business paying rates et all is arguing for them.

I wish SC all the very best but would warn that being right "on paper" is not even half the reality business.

[singlecoil]

21TonyK said:

fridaypassion said:

Apart from one fellow in the country its fair to say that the current system of business rates is universally viewed as unfair.

This is where the thread should have ended. But, one guy who is yet to actually run a business paying rates et all is arguing for them.

If you had read the thread you would know that I have indeed paid business rates in the past. Nor am I arguing for them. What I am arguing is that rates alone do not cause businesses to fail. There are millions of businesses in the UK paying rates without failing.

[21TonyK]

singlecoil said:

21TonyK said:

fridaypassion said:

Apart from one fellow in the country its fair to say that the current system of business rates is universally viewed as unfair.

This is where the thread should have ended. But, one guy who is yet to actually run a business paying rates et all is arguing for them.

If you had read the thread you would know that I have indeed paid business rates in the past.

Well I un/fortunately don't have time to read the whole thread but suffice to say 9 pages on you are still in disagreement with everyone else.

Good luck with your enterprise.

/Completely OT but a relative of mine in Mallorca went to a kitchen shop for a redesign and new kitchen only to be offered the same layout with new fittings etc. They tried a few places with a budget of 30K euros+ and basically got offered nothing more than what B&Q do over here. Just a point you might consider. English speaking designer in a wealthy ex-pat market?

[singlecoil]

21TonyK said:

singlecoil said:

21TonyK said:

fridaypassion said:

Apart from one fellow in the country its fair to say that the current system of business rates is universally viewed as unfair.

This is where the thread should have ended. But, one guy who is yet to actually run a business paying rates et all is arguing for them.

If you had read the thread you would know that I have indeed paid business rates in the past.

Well I un/fortunately don't have time to read the whole thread but suffice to say 9 pages on you are still in disagreement with everyone else.

I noticed that too, though it's not everyone.

21TonyK said:

Good luck with your enterprise.

Thanks

21TonyK said:

/Completely OT but a relative of mine in Mallorca went to a kitchen shop for a redesign and new kitchen only to be offered the same layout with new fittings etc. They tried a few places with a budget of 30K euros+ and basically got offered nothing more than what B&Q do over here. Just a point you might consider. English speaking designer in a wealthy ex-pat market?

Thanks for that too, but I'm in the latter stages setting up something closer to home

I can do mail order though

[anonymous-user]

The noise surrounding the Business Rates issue is increasing.

I listened to a Radio 4 programme the other day where a guy who owned and ran several pubs was planning to close two of them due to the increases, and numerous other contributors were saying similar things.

Article from the guardian looking at the impact in small businesses and shops:

https://apple.news/AwWFd5RLbRc2DGNrGqnxK-g

This increase really seems a step too far and many people seem resigned to the fact they are simply going out of business due to it.

[surveyor]

NinjaPower said:

The noise surrounding the Business Rates issue is increasing.

I listened to a Radio 4 programme the other day where a guy who owned and ran several pubs was planning to close two of them due to the increases, and numerous other contributors were saying similar things.

Article from the guardian looking at the impact in small businesses and shops:

https://apple.news/AwWFd5RLbRc2DGNrGqnxK-g

This increase really seems a step too far and many people seem resigned to the fact they are simply going out of business due to it.

It was all over BBC yesterday. It's too complex though for the media to get in a 30 second segment.

[singlecoil]

There was a chap from the FSB on the TV this morning confirming that many small businesses will pay no rates at all in the future. I'd say that was good rather than bad for small businesses, but then I'm not trying to sell newspapers or get people to join my organisation.

[surveyor]

singlecoil said:

There was a chap from the FSB on the TV this morning confirming that many small businesses will pay no rates at all in the future. I'd say that was good rather than bad for small businesses, but then I'm not trying to sell newspapers or get people to join my organisation.

Those who get exempted it's good news. But lot's won't.

There will be some sort of transition scheme that will phase in large increases. But the details are not yet public.

[singlecoil]

surveyor said:

singlecoil said:

There was a chap from the FSB on the TV this morning confirming that many small businesses will pay no rates at all in the future. I'd say that was good rather than bad for small businesses, but then I'm not trying to sell newspapers or get people to join my organisation.

Those who get exempted it's good news. But lots won't.

There will be some sort of transition scheme that will phase in large increases. But the details are not yet public.

Well, it's definitely not so good for the larger businesses. I presume they are thinking that the larger the business the more they can afford.

[Chrisgr31]

surveyor said:

There will be some sort of transition scheme that will phase in large increases. But the details are not yet public.

The details are public and can be found at http://www.legislation.gov.uk/ukdsi/2016/978011115...

I do have a more friendly version in the office, I will try and get that posted next week.