The Government are continuing their assessment into the cost of renting warehouses, as they re-evaluate the way business pay their rates.
Their findings won’t be published for a while… however, they are expected to land online retailers with a hefty business rates bill.
Online Retailers Have It Best?
Online retailers often pay much lower business rates than businesses on the high street.
Part of the problem though is that the recent surge of online efforts (due to a larger reach and lower running costs), has meant that more and more businesses are closing their high street stores and instead choosing to focus their efforts online.
Of course, from a financial point of view this makes sense, but many argue it is having a disastrous effect on our high streets and crippling local economies.
The Business Rates Revaluation
High Street businesses claim that these decisions are hurting them, and the government need to lower business rates for high street businesses, and increase them for those who are online.
Doing this will help even out the amount that businesses pay, whether they are online or on the high street.
When 2021 comes round, it looks like they will have their way. Bills are expected to rise for online retailers, and high street businesses will see theirs fall.
This year sees a business rate revaluation and its findings will set the new prices for 2021.
At the moment these revaluations take place every 5 years, however, this gap will be brought down to just 3 years.
Between 2013 and 2018 rents rose by more than 40 percent in the midlands, and even more in the south east.
Businesses have argued that this is too long of a time frame for business rates to be adjusted and has been the reason we’ve seen many stores close on our high streets.
What Should Business Owners Expect?
For now, online businesses will still operate in more favourable circumstances compared with their high street alternatives.
However, this news will hopefully stop big companies from closing their doors and switching their efforts to online instead, knowing that rates look like they will almost certainly change for online and high street businesses.
Online businesses will have to begin preparing for an increase in business rates, and budget accordingly.
For many high street businesses though, it will probably be a gruelling and gritty fight to survive until the new rates are announced and implemented.
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