As the new business rates come into effect, PGBuzz talks to retailers on the impact this will have on their business.
For those hoping that the Chancellor’s Budget on March 8 would offer some salvation on the business rate front their fears were not quelled. The Chancellor stated that there are no plans to abolish business rates, which annually make some £25bn for the Treasury. But there will be £435 million of further support for businesses facing significant increases in bills due to the business rates revaluation.
“Thankfully we’ve ended up pretty neutral as we have more shops in the north than south,” commented Paul Taylor, md of the Cardzone retail chain of 100+ stores, about the company’s new business rates bill. “I imagine for some card retailers in good locations down south they will have had big cost increases.”
Mark Janson-Smith, co-owner of the Postmark group of four specialist card shops in London, was less than pleased to receive the new costs. “Business rates on our Chiswick shop have gone up 60% and there is nothing we can do about it. Very frustrating,” he said.
Independent card shop owner Paul Jarman of Creased Cards in Brighton recognises that things could be better and they could be worse: “We’ll be within the capped rise process, so while we see a 16% increase in our rateable value, we are at least protected from an immediate huge hike in rates. We will still though be paying an extra £600 a year in what is a very small property. I’m yet to find anyone in the Brighton area that isn’t going to be paying more – so the government’s facts about the majority not paying more does not ring true for us here.”
For some retailers, help is at hand with small business rate relief. Lucy Sticka and Heidi Richardson, owners of Little Paperie in Ashbourne, Derbyshire, said: “Our rateable value has increased slightly but we will actually be in a better position as we are getting small business rate relief this year. Last year was pretty tough as when we first opened two and a half years ago there was a similar relief available so our monthly rates were really low. But once that finished in 2016/2017 we had to pay five times more than the previous year! So suddenly to not have to pay that huge amount out again is a big relief for us. It’s a tough time in retail so every penny counts.”
Chancellor Phillip Hammond’s promise that the government will be reviewing the re-evaluation process before the next rates re-evaluation has been viewed sceptically by retail associations.
“In 2014, the Chancellor announced a full structural review of business rates,” pointed out Alan Hawkins, chief executive of bira (British Independent Retail Association), in advance of the Budget. “All that has happened is a change to the appeals system and sticking plasters to the antiquated and unfair structure. We need fundamental reform and quickly. The government has clearly stated their support for the great British high street in these tumultuous times, but they have to demonstrate it.”