Business rates have always been a contentious issue for businesses, with many arguing that they are a significant burden on companies, particularly small businesses. One area where this issue becomes particularly pronounced is in the case of empty shops, which are subject to business rates despite not generating any income for the owner. The policy of levying business rates on empty shops has been criticized by many as discouraging property owners from revitalizing vacant premises and contributing to the decline of high streets across the country.
Business rates are a form of tax that businesses in the UK have to pay on the premises they occupy. The rates are based on the rental value of the property and are set by the government. In the case of empty shops, the rates are still payable by the owner, although there are some exemptions and reliefs available depending on how long the property has been vacant.
One of the main arguments against business rates on empty shops is that they can act as a barrier to investment and regeneration. Property owners who are already struggling to find tenants for their vacant shops may be put off by the additional financial burden of paying business rates on a property that is not generating any income. This can lead to a cycle of decline, where empty shops become derelict and neglected, further deterring potential tenants and investors.
Another issue with business rates on empty shops is that they can be seen as unfair to small businesses. Larger companies with multiple properties may be better able to absorb the costs of business rates on empty shops, whereas small independent retailers may struggle to keep up with the payments. This can create an uneven playing field and contribute to the dominance of big chains on our high streets, at the expense of smaller, more unique businesses.
Some argue that the current system of business rates on empty shops is in need of reform. One proposal is to introduce a temporary holiday on business rates for properties that have been vacant for a certain period of time. This would give property owners an incentive to bring their empty shops back into use, by reducing the financial burden during the initial period of vacancy.
Another suggestion is to implement a sliding scale of business rates on empty shops, where the rate decreases the longer the property has been vacant. This would provide an additional incentive for property owners to find tenants quickly and discourage them from leaving shops empty for extended periods of time.
There are also calls for a fundamental review of how business rates are calculated in general, with some arguing that the current system is outdated and no longer fit for purpose. The recent decline in footfall on high streets, due in part to the rise of online shopping, has put increased pressure on bricks and mortar retailers, many of whom are struggling to keep up with rising costs, including business rates.
It’s clear that the issue of business rates on empty shops is a complex one, with no easy solution. However, it is important that the government takes action to address this issue, to prevent further decline of our high streets and support businesses in these challenging times.
In conclusion, the policy of levying business rates on empty shops is a contentious issue that is in need of reform. The current system can act as a barrier to investment and regeneration, and is seen as unfair to small businesses. It’s essential that the government considers alternative approaches to business rates on empty shops, such as introducing temporary holidays or sliding scales, to encourage property owners to bring vacant premises back into use. Failure to address this issue could have serious consequences for the future of our high streets.