December 6, 2013
British bookshops to benefit from Chancellor’s rates discount, but more help is needed
by Zeljka Marosevic
Yesterday the Chancellor George Osborne delivered his Autumn Statement in which he announced some good news for small businesses, which includes bookshops. As the Guardian summed it up:
“Small shopkeepers will be given a £1,000 discount on their rates. Small businesses with properties worth up to £50,000 will be entitled to the discount. The chancellor also promised to limit rises in business rates to 2%, and has extended the small business rate relief scheme beyond 2014. Businesses will also be allowed to pay their rates in 12 monthly installments.”
This means that businesses that are worth less that £50,000 will experience some relief in the amount of taxes they pay, and the installments system will make it easier for businesses to manage these payments. The measure is to protect shops, cafes, pubs, restaurants and charity shops, which for a long time have been suffering and closing down, turning many local highstreets into retail wastelands.
For some time, bookshop owners have been arguing that they felt the government was not supporting small businesses, which give local communities their identity and provide independent choice to local residents. Their dissatisfaction was only intensified by the fact that Amazon, their biggest competitor, does not pay sales tax in the UK. Yesterday the Chancellor announced, “We’re backing British business all the way.”
Another positive measure to repair damaged highstreets is the introduction of a “50% discount from business rates for new occupants of previously empty retail premises for 18 months”. This should encourage new and existing small businesses to open retail spaces, and should give them more confidence in doing business.
Speaking to the Bookseller, Sydney Davies, head of trade and industry at The Booksellers Association, was pleased with the announcement:
“The Chancellor’s announcement that business rate rises will be limited to 2%, with businesses also be allowed to pay their rates in 12 monthly instalments is a welcome gesture in these tough times for booksellers.”
However, there is definitely more that can be done to protect and support small business, and it’s clear that many believe this is only the first step in a complete overhaul in the system of business rates, that Osborne needs to make. Helen Dickinson, director general of The British Retail Consortium told the Bookseller:
“The Chancellor has recognised the consensus that exists that the business rates system should be reviewed. The BRC is already conducting a detailed study into options to improve the business rates system with tax experts and look forward to playing a full part in the discussions that will take place with government on the reform of the system.”
According to the Bookseller, the earliest this could happen is 2017.
Zeljka Marosevic is the managing director of Melville House UK.