From the business desk: Bonkers business rates claim another victim
BONKERS business rates have claimed another high street victim in the Herald and Gazette area this week - proof the Government’s planned post-general election business rates review is too little, too late.
Readers of the Worthing news pages will be familiar with the story I refer to but for the rest, I will enlighten you.
The Mens Gift Shop has been a fixture in Worthing for 13 years but has been forced to close at the end of the month, as business rates suck revenue out of the retailer like a blood-thirsty leech.
Owner Michael Smith faced a yearly bill of £10,000 for his shop. Taking into account other costs, such as VAT, he would have to sell £24,000 of stock to pay off the bill.
Business rates relief schemes helped minimally and while the business was profitable, the amount left in the pot at the end of the year was barely enough to scrape by.
Yet Mr Smith noted the business rates system saw him paying more per square metre than the larger chain stores and online retailers like Amazon - a situation that is frankly absurd.
His solution is simple. Halve rates for smaller businesses and balance the books by levying more on those with deeper pockets - especially the online retailers. It is hard to argue against this.
In the Autumn Statement, chancellor George Osborne promised a full review into the business rates system and this was long overdue.
Unfortunately, this much-needed review will be delayed until after the general election. And with Labour and the Conservatives all but neck and neck in the polls, is there any guarantee the review will happen at all?
The topic of business rates has been a regular thorny topic during my time on the business desk.
One solution, put forward by the retail sector, could be to base business rates on sales, rather than the complex rateable value system in place currently.
This would create a level playing field and give smaller retailers a fighting chance.
But there are numerous potential alternatives, which need to be explored sooner rather than later.
Regardless of the outcome, it is too late for the Mens Gift Shop and I wonder how many more traders will fall before any review even gets off the ground.
And while the Government continues to delay the review, i struggle to see how it is taking the problem seriously.
The Herald and Gazette, along with Johnston Press publications, recently launched a petition into business rates, calling for an immediate review.
We got support for a review but not the vital part – an immediate one.