From a recent Evening Standard, for "business rates" read "land value tax":
Labour needs to do more to help get rid of business rates
Rohan Silvas' comment article ("Government's refusal to help small businesses is destroying them", March 15) admirably reinforces the case against persisting with business rates.
In days of physical manufacturing, assessing rates in accordance with the rentable [sic] value of the premises may have had an approximate correspondence with the value of the businesses concerned.
Nowadays, when a hedge fund can operate from the same space as a corner shop, it makes no sense whatever. It is the enemy of the start-up and subsequent rate rises, as Silva illustrates, can suddenly destroy viable enterprises.
It is difficult to understand why Labour has not committed itself to abolishing this tax should it get into office and its replacement with one that is based on turnover and/or profit. Surely these are ostensibly Conservative clothes that are ready to be stolen?
There is a larger point that parliamentary initiatives on such matters should be easier to frame and pass in a way which binds the executive. The Brexit process has revealed how parliamentary scrutiny is trapped in critical mode.
Sue Broadhurst and Neil Harvey.
Reply by Jim Armitage, City Editor:
Dear Sue and Neil
You are right. Business Rates are holding back potentially great businesses.
The latest round of rises in London have [sic] left a clear mark on our high street as the numbers of vacant shops climb. The average business in the capital now has to find £33,000 a year just to cover its rates bill. That really hurts small operations that don't have the deep pockets of national chains.
Meanwhile, online retailers don't pay high-street business rates at all. They pay them on their warehouses but these are in out-of-town areas where charges are lower.
Politicians won't scrap rates because they bring in 4.5 per cent of the UK tax take. We need that cash for schools and hospitals...
See how many factual inaccuracies, misleading statements, crass generalisations and faulty leaps of logic you can spot, or the subtle contradictions between the two diatribes!!
Monday, 25 March 2019
Killer Arguments Against LVT, Not (453)
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8 comments:
"It is the enemy of the start-up" versus "online retailers don;t pay high-street business rates at all". aren't startups often online retailers, because there is lower barrier of entry? so how is it? is it helping startups or is it its enemy?
Pw, excelkent.
Just swap the word "rent/selling price of property" with Business Rates.
Their position is only consistent if they think private property in land should be abolished as should the market in it. Its allocation being by lottery or State command and control.
BJ, yes, the most obvious one was pointing out that a business which pays £33,000 in rates is paying a total bill of about £90,000 in rent and rates.
The £33,000 figure is meaningless anyway - there are a few big shops on Oxford Street which pay £millions a year in rates - each one of those averages out with hundreds of small shops or serviced offices where the rent/rates is £10,000 year.
They don't define "start up" (there are multi million pound start ups and people doing it from their back room on a shoe string, they don't define "hedge fund" (for every hundred blokes doing it from their bedrooom at their parents house is one swanky multi-billion glossy hedge fund with huge offices in St James's), it's all dog whistle.
Since a lot of internet giants' payroll ends up in rent and mortgage payments, a residential land tax would do wonders to collect that.
And bricks and mortar shops are welcome to move to out of town where the rents (and rates) are cheaper. There's nothing to prevent them doing that except the minor matter of losing 99% of their custom.
And of course do these two complainants have any ideas on how to prevent rent rises gobbling up all the rates reduction? Or is this a helping hand for the minority of owner-occupied small business premises?
I like business rates. They keep my office rent down...
M, "There's nothing to prevent them doing that except the minor matter of losing 99% of their custom."
Bingo!
L, exactly. It's the only tax that really is somebody else's problem.
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