Rate relief could be a lifeline for village shop
Rate relief could be a lifeline for village shop
BUSINESS rate relief should be increased and offered more widely if the tide of small business closures in the countryside is to be halted.
Village shops, post offices and pubs could benefit from a change to the current system which, with its strict criteria and discretionary element, leaves many businesses unable to qualify.
According to the Federation of Small Businesses upping relief could offer a "lifeline" to many small firms. "A lot of businesses are suffering. Rates can be one of the biggest burdens," says a FSB spokesman.
"If we could have the 100% subsidy that would make a big difference to us," says Martin Armitstead, chairman of Ickford Village Shop Association, the Bucks group that bought its local shop when it faced closure a year ago.
"Running a village shop is tough. We thought saving the shop was tough – but running it is tougher. There is a lot of risk involved."
If a village shops annual rate bill is, for example, £500, that accounts for £2500 of sales on a margin of 20-25%. "Over a weeks sales just to pay the rates."
Oliver Harwood of the CLA is keen to see a wider range of businesses which make a contribution to village life getting mandatory – rather than discretionary – relief, including pubs. "A pub is not just somewhere to drink – it can be the only meeting place in the village."
Iain Loe of the Campaign for Real Ale agrees. "Give these places a fair break," he urges. "They dont have the economies of scale of Sainsbury – so they should be given help.
* Part of community
"There are a lot of people who do like to be a part of their communities and there should be areas provided where they can meet and discuss. The pub is an ideal place for this."
Bob Gardner of Humberts is also backing the call for lower rates in rural areas. "What we want to see is rural businesses protected because they provide a community service and provide employment."
And smaller businesses face a relatively bigger rate burden than larger firms, says Mr Gardner. "This is one of the failings of the current system."
Hardly the spirit…country pubs, like
The Woolpack in TVs Emmerdale,
are feeling the burden of business rates.
Impact of business rates*
Total turnover Rates as percentage of:
Turnover Overheads Profits
Under £50k 7.7 13.7 35.9
£50-£99.9k 5.5 10.3 31.8
£100k-£499.99k 2.5 5.2 17.2
£500k-£1.9m 1.4 3.7 15.9
£1bn or more 0.7 3.0 3.3
* Source: DETR 1998