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0 pointsjdietrich1y ago0 comments

It probably isn't good for the economy that large proportion of retailers are charity shops with very thin margins, despite the fact that they're being subsidised in terms of business rates and receive most of their stock and a lot of their labour for free. A charity shop is better than a vacant unit, but it generates very little value, even for the charity.

Local authorities want to see more diverse and vibrant high streets, but they're economically reliant on charity shops - local government collects and spends business rates, but central government funds the rates relief that charity shops receive. They simply can't afford to offer rate relief to other tenants who might use that space to build a more valuable business, because the tax system has distorted everyone's incentives.

In many towns, charity shops are visibly crowding out other kinds of retail. The relief for charities props up landlords and local authorities, taking away the urgency to reform the system and take steps towards a more sustainable future for declining high streets.

The new government are finally talking about fundamentally reforming the business rates system, but it's happening at least a decade later than it should have done.

https://www.cbi.org.uk/articles/the-path-to-business-rates-r...

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jimnotgym1y ago

There is some rate relief for small businesses, but everything you wrote is still true and happening.

seabass-labrax1y ago

You clearly know what you are talking about, but I don't think you're representing the situation fairly. There are all kind of ways in which businesses may be exempt or partly relieved of commercial property rates. The particularly important one is the the 'small business rate relief', which exempts businesses whose property has a rateable value of less than £15,000 - that's basically all high street shops outside of London.

If by 'other kinds of retail' you mean retail chains or department stores, then yes, the current tax regime causes them to be disadvantaged. But almost every kind of local high street company (including cafés, jewellers, newsagents, toy shops, and yes, even second-hand bookshops) is helped considerably by these tax breaks - it's not just charity shops.

There are lots of reasons why high street businesses and retail in general are struggling, but I'm confident that business rates aren't one of them.

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