Monday February 4 2019 THE NATIONAL MOTORCYCLE MUSEUM, BIRMINGHAM
A fair guess is that if an Amazon Tax is announced in the Budget (and with the cancelling of the self- employed NI reduction and noises about reinstating fuel duty, the Chancellor is dropping some really big hints about what he might do), it will be a new earner for the government, not a replacement for rates. And it will hit small retailers with online sales in exactly the same way as it would big etailers. And anyway, all of this is just about retail rates. What about the other £20 billion shelled out by office-based business and factories? Would they still be paying rates? Tangled indeed. The second approach has been to try to make the
current system work more fairly. Several bodies have put forward plans. Some involve an allowance, like an income tax personal allowance for each property, with tax payable only on the sum above the allowance. The Treasury looked at this before and didn’t like
it. If applied to all properties, it would require a multiplier (the rate of tax) on the remainder that’s much higher than at present. Targeting the current small business rate band at around £50,000, it would have to be charged at something like 65% of the rateable value (RV) – which sounds unpalatably high in political terms. The sums also need to be done with precision
here. It has been claimed that the average shop has an RV of well over £30,000, when in fact in England and Wales properties in the ‘Shop’ valuation category have an RV of just over £20,000 - not far above the upper limit for small business rate relief. Other approaches would provide an allowance that could be used across multiple small properties, to encourage small businesses to open new shops without a huge rates penalty. Small businesses created 35,000 new shops last year. This could encourage even more to do so, particularly those ready to add a branch to an existing shop. At the very least, some argue, just freeze it - to
stop the pain getting any worse. So there are lots of ideas and lots of public
talking trade
interest. Between revolutionaries and evolutionaries, there’s a wide range of approaches - but none is quite as simple as you’d hope. There’s always a complication somewhere and the tangle has yet to be undone. The Chancellor, of course, has many other tangles
to try to untie. The question is whether he will present a Budget to loosen such knots, or whether he will be tightening taxes in November in preparation for the momentous events of the year ahead.
• Michael Weedon is chair of the FSB [Federation of Small Businesses] Retail Policy Unit and managing director of exp2 Ltd, which carries out projects including research and report creation for clients in the retail industry, including data providers, place managers and individual retailers. He established exp2 in 2016 from a leading trade association role.
Michael’s contact details are: Mobile: 07411 763 551 Email:
Michael.weedon@exp2.co.uk Tw: @michaelweedon
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