Much has been said about internet shopping, its negative effects on the “high street” and therefore its negative effects on the value of retail real estate.
There has also been some comment about the effect of numerous charity shops, on the well-being of the high street. Maybe charity shops mean that a landlord will receive rent that would not otherwise be received. Also, a charity shop might generate a degree of footfall that would not be generated if a property remained empty. However, maybe the landlord will receive a higher rent because a taxpayer supported entity such as a charity can afford to pay more. When a property is let to a charity, the local authority invariably foregoes a large proportion of the Business Rates it might receive if the property were let to a "normal" shop or other trade. To what extent does a local authority then have to replace the % of Business Rates which a charity shop does not pay, by looking to get higher Business Rates from "normal" shops - or maybe central government coughs up the difference ?
There has also been some comment about the effect of numerous charity shops, on the well-being of the high street. Maybe charity shops mean that a landlord will receive rent that would not otherwise be received. Also, a charity shop might generate a degree of footfall that would not be generated if a property remained empty. However, maybe the landlord will receive a higher rent because a taxpayer supported entity such as a charity can afford to pay more. When a property is let to a charity, the local authority invariably foregoes a large proportion of the Business Rates it might receive if the property were let to a "normal" shop or other trade. To what extent does a local authority then have to replace the % of Business Rates which a charity shop does not pay, by looking to get higher Business Rates from "normal" shops - or maybe central government coughs up the difference ?
I understand that a charity is entitled to an 80% discount on its business rates and maybe 100% at the discretion of the local authority.
https://www.wolverhampton.gov.uk/business/business-rates/mandatory-and-charitable-rate-relief
However, for tax avoidance reasons, I believe that many charities set up a separate limited company in order to carry out their trading activities. I then understand that some cash strapped local authorities have been seeking full business rates on properties occupied by those companies.
This seems fair to me.
What do you think ?
https://www.civilsociety.co.uk/news/councils-trying-to-charge-charity-shops-full-business-rates.html
At the end of the day, reduced "high street" footfall is a problem for all retail businesses and can be a particular problem for struggling independent smaller businesses which generally do not have the same access to financial support as larger businesses. Also larger businesses are better able to pay for professional advice on the amount of business rates being demanded of them.
https://www.wolverhampton.gov.uk/business/business-rates/mandatory-and-charitable-rate-relief
However, for tax avoidance reasons, I believe that many charities set up a separate limited company in order to carry out their trading activities. I then understand that some cash strapped local authorities have been seeking full business rates on properties occupied by those companies.
This seems fair to me.
What do you think ?
https://www.civilsociety.co.uk/news/councils-trying-to-charge-charity-shops-full-business-rates.html
At the end of the day, reduced "high street" footfall is a problem for all retail businesses and can be a particular problem for struggling independent smaller businesses which generally do not have the same access to financial support as larger businesses. Also larger businesses are better able to pay for professional advice on the amount of business rates being demanded of them.
Many retail premises in Wolverhampton City Centre are empty, despite many having been let to a charity. Wolverhampton City Council has been asked if it has any plans to reduce business rates (and rent for units which it owns). In any event I understand that a local authority has the power to grant discretionary local discounts for certain smaller businesses although I believe it would be a matter for each business to make its own claim
A business rates reduction might mean that tenants can more easily be found for the empty premises as well enabling some businesses to continue to trade.
https://www.wolverhampton.gov.uk/business/business-rates/new-reliefs-2017
https://www.theguardian.com/business/2019/sep/11/wolverhampton-wonders-the-indie-shops-bucking-the-high-street-trend
This is not a new problem
https://youtu.be/PjtvW9S3FR8
Budget March 2020 - update
In his March 2020 Budget, the Chancellor announced a Business Rates holiday for retail small businesses and a review of the whole system to take effect from April 2021.
Good news !
However, it is understood that Wolverhampton City Council has since posted Business Rates demands to businesses which are likely not to have to pay.
https://www.wolverhampton.gov.uk/business/business-rates/new-reliefs-2017
https://www.theguardian.com/business/2019/sep/11/wolverhampton-wonders-the-indie-shops-bucking-the-high-street-trend
This is not a new problem
https://youtu.be/PjtvW9S3FR8
Budget March 2020 - update
In his March 2020 Budget, the Chancellor announced a Business Rates holiday for retail small businesses and a review of the whole system to take effect from April 2021.
Good news !
However, it is understood that Wolverhampton City Council has since posted Business Rates demands to businesses which are likely not to have to pay.
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