Business Rates - Why so bloody high?

[Tsippy]

I had been thinking of opening a restaurant in the city where I live but after looking into the business rates I don't think I'll bother!

For a medium sized restaurant with about 20 tables I'm looking at having to shell out £50k+ in pissing business rates for somewhere of a decent size

It led me to a few questions

1) What kind of encouragement does this give people to start a business? I had hoped to give it a go and eventually employ around 12 people but the taxation is ridiculous

2) Surely if the business rates were lower, it would encourage creation of more jobs / business thus reducing unemployment

3) How many other people are in a similar situation to me where they fancy creating a business but do not want to risk it due to the rates?

I'm sticking to my mobile sandwich bar instead

[Dick_Phallus]

Which city was this out of interest? I do sometimes wonder how some places seem to stay in business.

[tinman0]

Tsippy said:

1) What kind of encouragement does this give people to start a business? I had hoped to give it a go and eventually employ around 12 people but the taxation is ridiculous

2) Surely if the business rates were lower, it would encourage creation of more jobs / business thus reducing unemployment

3) How many other people are in a similar situation to me where they fancy creating a business but do not want to risk it due to the rates?

1) None.

2) Maybe. But then the rent is probably on the steep side as well. And all the other costs and taxes. Plus you are talking about a restaurant which are generally a bad business to be in. If they don't find their feet fast, they are toast relatively quickly. But you already know that.

3) One of the best things I did was closing my office. License to print money for everyone but the tenant. And you don't even get a bin service!! A grand a year for some guy to hoover the stairs ffs.

[thinfourth2]

1) All businesses are evil as they exploit the working man and people making money is morally wrong and this must be discouraged.

2) See answer 1

3) Go on the sick comrade


All from the labour handbook

[Puggit]

I was just finishing at Uni when Labour took power in '97. Anyone who can comment what rates were like before they came in?

[Maxf]

Puggit said:

I was just finishing at Uni when Labour took power in '97. Anyone who can comment what rates were like before they came in?

Broadly similar. They were still based on rental values (or profit/rebuilding costs in some rare cases) - of course, rents have risen.

[Martial Arts Man]

Rates on my business property, which is in B'ham City centre, amount to 25% of my rental value.

In return, I get nothing visible.

My father used to operate the same premises before me for 40 years. He reckons that the rates have doubled under this Labour gov; which is similar to the rise in general taxation I guess.

Having said that, business also suffers from stealth taxes. For instance, I now have to pay £800 per year for "free matter distribution permits" to allow me to hand out flyers for the business. Ostensibly, this is an environmental problem...yeah, right!

I am currently looking at another premises close by...rates are 40% rent somehow! The rates thing is the only thing making me um and ahh about taking it on.

It would make sense for the council to offer reduced or deferred rates to start ups within their zones for a few months.

[don4l]

Martial Arts Man said:

Rates on my business property, which is in B'ham City centre, amount to 25% of my rental value.

You don't know how lucky you are. Our rates are 96% of the rental, and equate to £7k per employee.

Absolute theft.

Don
--

[davido140]

precisely why we rent a suite at a "business centre" type place. The host company pays the rates.

Buying a small tading estate unit would make far more sense for us, we could probably buy something outright.

However we'd pay more in business rates than we do in rent now!!!!

Go figure...

[Maxf]

Martial Arts Man said:

I am currently looking at another premises close by...rates are 40% rent somehow!

Broadly speaking this is a good assumption to make - 40% of the rental value at 2008 should be the ballpark figure (but you do get some stepped allowances built in).

[Martial Arts Man]

Maxf said:

Martial Arts Man said:

I am currently looking at another premises close by...rates are 40% rent somehow!

Broadly speaking this is a good assumption to make - 40% of the rental value at 2008 should be the ballpark figure (but you do get some stepped allowances built in).

[Eric Mc]

Because Domestic Rates (i.e. Council Tax) are capped, Councils try to make up some of the shortfall by upping Business Rates.

The whole funding of Local Government is a disaster in the UK and needs a massive rethink.

[topjay]

don4l said:

Martial Arts Man said:

Rates on my business property, which is in B'ham City centre, amount to 25% of my rental value.

You don't know how lucky you are. Our rates are 96% of the rental, and equate to £7k per employee.

Absolute theft.

Don
--

Yep anything around London i think you will find the rates almost exactly the same as the rent, as mentioned above. I personally think business rates are one of the biggest scams ever.

[StevieBee]

There's a town near to me where the dominant business is one of the major supermarkets. It's believed by many and yet to remain disproved by the supermarkets that they somehow influence business rates to ensure no competition.

[andy43]

thinfourth2 said:

1) All businesses are evil as they exploit the working man and people making money is morally wrong and this must be discouraged.

2) See answer 1

3) Go on the sick comrade


All from the labour handbook

This.

[Soovy]

andy43 said:

thinfourth2 said:

1) All businesses are evil as they exploit the working man and people making money is morally wrong and this must be discouraged.

2) See answer 1

3) Go on the sick comrade


All from the labour handbook

This.

+10,000


How dare you try to better yourself.

[Yeast Lord]

andy43 said:

thinfourth2 said:

1) All businesses are evil as they exploit the working man and people making money is morally wrong and this must be discouraged.

2) See answer 1

3) Go on the sick comrade


All from the labour handbook

This.

Its scary but its true. Not just the rates but the whole bureaucratic regime they have in place, they do not want to encourage people to start their own businesses. For gods sake you need a licence to play a flipping radio on your premises.

I think they feel that house price inflation and growth in the public sector is all that is required to maintain an economy.

[Eric Mc]

Yeast Lord said:

andy43 said:

thinfourth2 said:

1) All businesses are evil as they exploit the working man and people making money is morally wrong and this must be discouraged.

2) See answer 1

3) Go on the sick comrade


All from the labour handbook

This.

Its scary but its true. Not just the rates but the whole bureaucratic regime they have in place, they do not want to encourage people to start their own businesses. For gods sake you need a licence to play a flipping radio on your premises.

I think they feel that house price inflation and growth in the public sector is all that is required to maintain an economy.

Since when did councils charge for use of radio in a business premises?
Are you conflating the Performing Rights Society with Local Councils?

Councils need to be funded somehow. However, since the 1980s, they have had less and less freedom to decide on how they should raise their funds.
As a result, they grab what they can where they can.

As I said earlier, the whole way local government is run and funded in the UK needs a serious review. As it is, local government hardly exists in its true sense anymore, with so many restrictions being placed on Councils by central government - and this is backed up by the fact that 75% of local government funding comes from central government.

[KANEIT]

I was under the impression that business rate payments are taken by the local council, acting as a billing authority, then transferred to central government. The government then distributes this 'pot' around the councils based on each area's population.
Those who have the joy of having to pay higher rents, therefore higher rates, can live in the knowledge that they will never see a return, in services and such, on a great proportion of the rates they've paid. Who knows maybe their rates go to help their competitors in neighbouring authorities.

It would be interesting to see party policies on this subject. Just another stealth tax?

[Yeast Lord]

KANEIT said:

I was under the impression that business rate payments are taken by the local council, acting as a billing authority, then transferred to central government. The government then distributes this 'pot' around the councils based on each area's population.
Those who have the joy of having to pay higher rents, therefore higher rates, can live in the knowledge that they will never see a return, in services and such, on a great proportion of the rates they've paid. Who knows maybe their rates go to help their competitors in neighbouring authorities.

It would be interesting to see party policies on this subject. Just another stealth tax?

This is what I always thought, the government as usual gets their scrubby hands on the cash and does with it whatever they please.