EXCLUSIVE: Mobility retailers respond to business rates “tax holiday” announced in Budget 2020
Thousands of mobility retailers across the country will not pay any business rates for the next financial year to help offset the expected fall in demand caused by coronavirus.
Announced in the Budget, companies with a rateable value of less than £51,000 will be eligible for the tax holiday in a move that has been widely praised by the retail sector.
Forming part of a package of “extraordinary” measures to support small to medium-sized retailers facing falling footfall as a result of coronavirus preventing customers from shopping, chancellor Rishi Sunak said the tax cut will be worth around £1 billion.
Business rates have long been an issue in the mobility retail sector with bricks and mortar retailers, particularly on the high street, arguing that the tax makes for an unfair playing field against online-only rival retailers who do not share the same costs or provide the same level of customer service as their physical counterparts.
The abolishment announcement has been largely welcomed by mobility retailers; however, many have stated that a comprehensive review of the business rates system is still needed.
“However, it does not create a long-term solution to level the playing field with internet-only stores who can only exist due to the showroom exposure and physical presence of bricks and mortar businesses.” Alastair Gibbs, TPG DisableAids
Ben Watts, Director of Hampshire-located Solent Mobility Centre, told THIIS: “This is great news and will be a great help in the next year with not knowing what will happen. With the high street footfall falling due to various reasons, this will help in budgeting for the year ahead.
“I believe this could be pushed further and continued into the future. The business rates are far too high anyway as we do not even get a bin provided.”
Emphasising the need for a more in-depth look into business rates, Jonathan Brown, Chairman of Harrogate-based mobility retailer Change Mobility, said: “A long-term approach is needed for high street shops but as an interim measure this will certainly assist the mobility sector and is a welcome abolition.”
Echoing Jonathan’s thoughts, Alastair Gibbs, Managing Director of Hereford’s TPG DisableAids, commented: “Whilst high street footfall and spending is at an all-time low, it is a very welcome relief to have a year without the extra burden of business rates on the premises from which we trade.
“However, it does not create a long-term solution to level the playing field with internet-only stores who can only exist due to the showroom exposure and physical presence of bricks and mortar businesses.
“The assessment of the users’ needs and capabilities cannot be accurately measured by a keyboard questionnaire and minor adjustments cannot be completed by email. So, in reality, our mobility shops still support online retailers that never have rates to pay.”
“My big disappointment is the large Internet suppliers such as Amazon etc. who look like, once again, they are given a free ride on our tax system.” Mike Williams, Ableworld
Despite the 12-month SME abolishment, no other reforms to the tax were announced in the Budget. Instead, the chancellor announced the launch of a full review of business rates which will take later in the year.
Discussing the abolishment of business rates for the year, Ableworld’s MD Mike Williams said the decision was the right move to make but more needed to be done to tackle large online-sellers avoiding tax.
“As always, the devil is in the detail which I haven’t seen yet. It looks like it will help a lot of our Franchises which is great news and possibly ourselves,” he stated.
“I certainly don’t have an issue with the Government supporting and helping small businesses they have been neglected for a long time and are the backbone of our country. My big disappointment is the large Internet suppliers such as Amazon etc. who look like, once again, they are given a free ride on our tax system.”
The point of large internet-sellers was also raised by Dr Simon Festing, Chief Executive of the British Healthcare Trades Association, adding “for the small high-street retailers trying to compete with the internet giants, this move by the Government is a welcome start and is a tacit acknowledgement of the unequal playing field which has been allowed to endure. A comprehensive review of business rates is long overdue.”
Mobility retailers’ attention will now turn to the business rates review set to be published in the autumn.
Suggesting how the tax system can be made fairer in the mobility retail sector, TPG DisableAid’s Alastair finished: “A better solution for the long term, in my opinion, would be to disallow Zero-rate VAT on the products if a face-to-face assessment and handover training is not completed.
“This has the effect of making online retailers more expensive than they currently are by 20% and gives breathing space to the high street retailers to retain sufficient margin to cover the additional costs such as business rates, heat, light, staff, etc.”
https://thiis.co.uk/exclusive-mobility-retailers-respond-to-business-rates-tax-holiday-announced-in-budget-2020/https://i1.wp.com/thiis.co.uk/wp-content/uploads/2019/10/UK-high-street-unsustainable.jpg?fit=1000%2C667&ssl=1https://i1.wp.com/thiis.co.uk/wp-content/uploads/2019/10/UK-high-street-unsustainable.jpg?resize=150%2C150&ssl=1Business SupportCoronavirus NewsCOVID-19 Trade NewsGovernment & Local AuthoritiesNewsroomRetailer NewsSector NewsTrade NewsAbleworld,BHTA,British Healthcare Trades Association,Budget 2020,business rates,chancellor Rishi Sunak,Change Mobility,coronavirus,COVID-19,mobility retailers,Solent Mobility Centre,tax holiday,TPG DisableAidsThousands of mobility retailers across the country will not pay any business rates for the next financial year to help offset the expected fall in demand caused by coronavirus. Announced in the Budget, companies with a rateable value of less than £51,000 will be eligible for the tax holiday in...Calvin BarnettCalvin Barnettcalvin@thiis.co.ukAdministratorTHIIS Magazine