Business rates

Public redundancy bill hits seven-year high

People walk past a store with the words 'Closing down sale 20% off everything' painted on the window
PA Media

Taxpayers funded a surge in redundancy payments last year after a spate of High Street shop and restaurant failures,saccording to property advisor Altus Group.

The amount paid out by the government's Insolvency Service rose to its highest level in seven years, figures obtained by the group show.

It follows a number of high-profile failures, including Mothercare and Thomas Cook.

As a result, the Insolvency Service picked up a £346m bill, Altus says.

That was 16% higher than in 2018.

A freedom of information request by the real estate consultancy revealed that £223m of last year's bill covered redundancy payments.

Another £64m was for money that would have been earned if staff had worked a notice period.

Shoezone chief warns, if business rates do not change stores will close

BBC Radio 5 Live

Anthony Smith, the chief executive of Shoezone has told Wake Up to Money that it will close up to 100 stores if business rates do not change and if VAT prices go up.

Mr Smith said that 10 yrs ago rates would have been about 26% of the retailing chain's rental value, but today its more like 54%.

"Politicians and consumers want vibrant High Streets, retailers like us to keep their shops open... There is a lot of talk about the regeneration of and re purposing of town centres which we are all up for, but whatever goes into those shops the rateable value of these stores for any purpose is still simply too high," he said.

The rateable value is based on the value of the property, much like the council tax is figured.

He continued: "It's a simple maths question. Every time a lease comes up...we'll look at the mathmatics of it and if we are not making money out of it - and we don't see as being able to make money for the next five years - the shop will unfortunately close."

Business rates 'hurting communities'

Today Programme

BBC Radio 4

F Hinds store

More than 50 retailers, including supermarkets and department stores, have written a letter to Chancellor Sajid Javid calling for business rates reform.

One signatory Andrew Hinds, a director at family-run jeweller F Hinds, says business rates place an unfair burden on shops and are leading to more store closures.

He told the BBC's Today programme: "The overall burden of business rates is just too high, and we're paying a disproportionate amount of total business taxes."

"As a retailer, we've been around for 150 years, hopefully we'll be around for another 1500. But where we'll be doing business is where it's financially sustainable - online, larger places."

He added: "What we need is something to help the communities, the smaller locations. We have some stores we've had for 50 or maybe even 100 years around the country, and we see those communities suffering and declining. We want it to be changed before it becomes too late."

Why have business rates become a battleground?

High street in Inverness
Getty Images

Meanwhile in Scotland a battle is looming at Holyrood over who controls nearly £3bn of tax revenue raised each year in business rates.

An amendment to a bill currently going through the Scottish Parliament could see the power to set business rates change hands from the Scottish government to local authorities.

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