Nick Boles, the Planning Minister, wants to relax planning rules so that town centre shops can be converted into homes quickly, after acceptance that some high streets in the UK are dying in their traditional form.Good news, yes?
Based on official figures, the Government would miss out on £1bn in business rates payments over the next decade if just a quarter of the empty shops in Britain are converted into houses and flats.Oh. Well, every cloud, and all that.
The estimated tax loss is based on the shortfall councils will face from council tax paid by the occupants of the new homes, compared to the business rates paid by retailers or lands when it was a commercial property.You mean, ‘when it was an occupied commercial property’..?
The problem is, it isn't. And won’t be. In Southend, the grandly refurbished Victoria Circus development is still more than half empty. Those shops it did attract in, like Boots and Next, vacated premises in the High Street, leaving holes that are only partially filled to this day.
Jerry Schurder, head of rating at Gerald Eve, said converting retail property into homes could create “havoc” for councils.
He said: “Making conversions easier could have a very positive effect on towns that have seen a permanent contraction in the retail sector, but only a foolish council would use its powers to reduce its income base.”It’s current income base is zero. Unless it can attract a business in to pay those business rates, it might have to settle for council tax.
Something is always better than nothing, surely?
I don't quite understand Mr Schruders reasoning. Local councils collect business rates but only retain about 2% or thereabouts as a handling fee. The rest goes staight on to the treasury. Or I always thought so - please correct me if I'm wrong.
Therefore if the business rates on an empty shop (currently non existant because it is empty) are converted into council taxes from dwellings that is a gain for the council concerned albeit a potential loss for the treasury should retail occuoation wish to increase sometime in the future- which seems rather unlikely.
Don't get me started on the complete and utter cock stump called the "Uniform Business Rates".
You know the one, where your small high st shops rates quadrupled, but large supermarkets made out like fucking bandits, you know that one!!
In a matter of months, all the small shop that had been there for generations, all started to close down, and high sts became the haunt of derelict shops, apart from the rash of charity shops (which are of course exempt) and mobile phone shops which close down in less than a year only to open again across the street. (I have a theory about this phenomenon, and it's as they're "A new business", they're exempt/deferred the first years rates, so once they become due, they go out of business, only to start up again as well you guessed it, another "New Business".
It's like it was planned that way, isn't it?
I think the building owner pays business rates whether the building is occupied or not.
Just googled it - you get 'relief' for 3 months and then it's full whack.
The Government introduced a new rates retention system this year under which local authorties retain a proportion of any increase in locally collected rates revenues, but have to fund themselves a share of any reduction. They presently collect the same rates from an empty shop as an occupied one (after a 3 month empty rate free period) and therefore if a property is converted to residential use it is no longer assesssed for business rates and the council will lose revenue. So it would be financially better for councils to retain empty shops than see them converted to residential as the Council Tax receipts will normally be far less than the business rate.
"... should retail occuoation wish to increase sometime in the future- which seems rather unlikely."
Well, quite! I mean, no-one's expecting them to convert the minute the last till is unplugged!
These are designed for areas where shops have been empty for years...
"...and mobile phone shops which close down in less than a year only to open again across the street."
The scourge of any high street! :/
"...you get 'relief' for 3 months and then it's full whack."
Which, for a small business, is clearly too high.
" They presently collect the same rates from an empty shop as an occupied one.."
Ah. Those unintended consequences again?
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