LOCAL GOVERNMENT

Council Tax
Businesses In The High Street

 

Council Tax And Businesses In The High Street

 

When I ran my own businesses, I was always concerned about the level of Council Tax that was payable for each of our offices, as indeed I am sure any business owner would be. It certainly rankled with me that I could not even get the office dustbin emptied without paying an extra fee.

However, looking at the actual amounts that my business had to pay for the relatively small second floor office premises that we used, I often wondered if larger organisations were paying a truly proportionate amount.

I suspected that the traditional small high street retailers were probably paying even more council tax than me, and that the chain stores were probably not. My suspicion was simply that the big chain stores were perhaps being given some sort of discount or subsidy, to the detriment of our small high street retailers.

Of course, when running your own business, there are limits on the time that you can afford to spend researching these sorts of things, and even then one must ask what effect you are likely to be able to have to bring about change, assuming that you did discover something untoward.

Well there are websites that you can access to find out such information, and I am pleased to be able to reveal my research to you below.

I should just say that in trawling through the appropriate websites to secure this comparison information, it necessitated trying to understand the incredibly complex and confusing Council Tax systems. This in itself took me several hours. Indeed, the subject of Council Tax calculation is so complex that it is yet another example of Local and National Governments generating careers for civil servants out of a relatively straight forward tax collection issue.

Perhaps the current complexity is something that we have acquired over many decades, but given a fresh start, I can assure you that no businessman that I know of would come up with this crazy, complex and massively time consuming system to resolve such a relatively simple tax collection function. The extent of the complexity in Council Tax assessment and collection means that all Councils will be spending huge time and effort, and employing large numbers of people, completely unnecessarily.

 However, I looked at a small retail premises, at street level, in the high street of Market Harborough in Leicestershire, and compared it with Tesco who have a retail premises on the same street. I shall call one booze and fag shop, and the other Tesco.

Booze and Fag Shop has a tiny sales area in his shop of only 29.4 sq meters for which his ratable value is apparently £5,700.

However, as he is designated a “small Business” he gets a small business relief discount and only (?) pays £2,357 in rates per year.

Tesco has a sales area of 815 sq meters for which it’s ratable value is apparently £64,500.

However, although Tesco does not get a small business relief discount, they do actually pay £31,282 in rates per year.

OR … to put it another way …. If Tesco paid rates at the same level as the Booze and Fag Shop, their rates payable would be £65,338 per year.

OR … to put it another way … if the Booze and Fag Shop paid rates at the same level as Tesco, their rates payable would be £1,128 per year.

Another way of saying the same thing is that the Booze and Fag Shop pays 109% more rates than Tesco, indeed, slightly more than double the rates that Tesco pays.

I think we should also bear in mind that the above example is one where Tesco is actually on the high street. My instinct tells me that if you look at Sainsbury, which is actually located off the high street behind some shops, with its’ own car park, then you will probably find that the Council Tax comparison with our small high street retailer is even more unfair.

When people ask why their high street is closing down, why there are no bakers, butchers or green grocers, especially in comparison to the thriving chain store grocers, then the above is part of the answer.

Of course, one could also ask why the rates system has to be so complicated in the first place?