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This is where I disagree. Business rates is simply the government taking a slice of the landlord’s income. Slash business rates and landlord’s will simply charge more. So it’s a good tax in my opinion.

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38 minutes ago, Castlevania said:

This is where I disagree. Business rates is simply the government taking a slice of the landlord’s income. Slash business rates and landlord’s will simply charge more. So it’s a good tax in my opinion.

Up to a point, yes, but without this incentive I know for sure that we wouldn't have taken on a physical office, which then allowed us to take on staff, grow the business etc. Once you get to a certain size, you are going to have to pay rates anyway, but I think undoubtedly it encourages entrepreneurship overall.

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59 minutes ago, Castlevania said:

This is where I disagree. Business rates is simply the government taking a slice of the landlord’s income. Slash business rates and landlord’s will simply charge more. So it’s a good tax in my opinion.

No -- you could do that in all sorts of ways, and best by pushing up corp tax.

The reason business rates are good is that it is a punishment on LLs leaving rents high and accepting empty commercial property -- the rates need to be paid regardless, so LLs will lower rent to get someone paying the BR.  This has helped to put a lid on commercial property prices outside of the capital.

IMO we need to have the same system for residential property -- an unavoidable tax based on a decent %age of rental value (and bring that up to date, rather than some historical thing).  It is bonkers that people are able to hold property empty or mainly-empty, either as an investment thing or because of poshness, without any restraint.

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1 hour ago, Castlevania said:

This is where I disagree. Business rates is simply the government taking a slice of the landlord’s income. Slash business rates and landlord’s will simply charge more. So it’s a good tax in my opinion.

Rents are negotiable.Taxes aren't.

You can default on the former without much consequence if you have no assets.

16 minutes ago, dgul said:

No -- you could do that in all sorts of ways, and best by pushing up corp tax.

The reason business rates are good is that it is a punishment on LLs leaving rents high and accepting empty commercial property -- the rates need to be paid regardless, so LLs will lower rent to get someone paying the BR.  This has helped to put a lid on commercial property prices outside of the capital.

IMO we need to have the same system for residential property -- an unavoidable tax based on a decent %age of rental value (and bring that up to date, rather than some historical thing).  It is bonkers that people are able to hold property empty or mainly-empty, either as an investment thing or because of poshness, without any restraint.

An excellent point.I think the rates are levied when the properties are empty.

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1 hour ago, sancho panza said:

 

An excellent point.I think the rates are levied when the properties are empty.

It is, IMO, a pragmatic setup -- when a tenant leaves you get 3 months without business rates to get a replacement.  After that you (LL) are paying until someone turns up.

This protects normal people from too much pain on voids, but punishes those unwilling to lower rents to reflect the state of the economy.  And, of course, it really punishes those only interested in holding an asset for capital appreciation.

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13 minutes ago, dgul said:

It is, IMO, a pragmatic setup -- when a tenant leaves you get 3 months without business rates to get a replacement.  After that you (LL) are paying until someone turns up.

This protects normal people from too much pain on voids, but punishes those unwilling to lower rents to reflect the state of the economy.  And, of course, it really punishes those only interested in holding an asset for capital appreciation.

The only fly in the ointment is the fact that there's the 'chariddee' opt out.

I've known some biggish players install some small charities to avoid business rates.

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21 hours ago, azzuri82 said:

This has already happened with the £ devaluation, the little cafe / greasy spoon I frequent has pushed up their prices by 20% in the last 18 months. It's not rent, rates or staffing costs that have done this, but wholesale food and energy costs.

A wholesale bakers I visited a couple of weeks ago was making a 6% net margin, which is dreadful for a small business. Turnover was static for the last 2/3 years but their energy costs are jumping by 18%'ish in October which will almost wipe out their margin completely.

They didn't think their customers would accept price rises so have to keep their prices at current levels otherwise they would move their business elsewhere. Vans, catering equipment, the unit itself are all pretty old, so this company is now boxed in to a death spiral as far as I can see. Selling £500k of bread and muffins per annum and can't make a profit, crazy.

Problem may be that they are tied into a 15 year fully repairing lease.

They were probably toast (sorry!) from the day they signed that. Only two options - ride it out or go bust.

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