Tuesday, May 4

A Visit to Havant

I was in Havant recently and noticed a small shop in the Meridian Centre which appeared to be closing down, 'Jon's Bits and Bobs'. Inside he seemed to be selling wool (for knitting) and other similar stuff.
But what was more interesting was the big photocopied letter from Havant Borough Council listing the months of council tax 'Jon' owed, placed prominently on the shop window!

What most people are unaware of is that commercial Council Tax rates are huge. Jon was apparently expected to pay £980 a month, yes that is per month, for an averagely sized small shop. Plus he probably had to pay a similar amount for rent per month as well. I'm estimating some £11,000 per year for Council Tax and a similar amount for rent. So even before thinking about making a profit, a small shop owner needs to have enough people coming in, combined with products with a suitable margin, that will firstly clear some £20,000 per year, plus generate a significant amount above this to pay other bills and provide an income (oh and then there are the other taxes as well!).

So it isn't at all surprising that most shops sell mass produced junk with a guaranteed margin, to produce a significant income to pay the bills. The old shops that could in the past get away with a small number of customers per week, just can not survive and if you add the fact that they have to compete with bigger stores with more political clout, it isn't surprising that that many small shops struggle.


Anonymous said...

It's a vicious cycle isn't it. The higher the rates cause businesses to fail, empty units put off other businesses to the town, result = ghost town. Surely Havant council don't want this and need to re-think how much they are bleeding from these small businesses.


TheVille said...

I think business council tax should be graded in some way to help small high street retail start ups, especially if they have a green business plan.

eg. maybe for the first few years, a small start up retail business should have a reduced council tax rate.

eg. say £200 a month.

It wouldn't apply to large retail businesses such as Tescos, Argos etc.

By doing this a small business can start establishing a customer base and figure out how to compete.

There may even be a case for permanent low rates for some businesses.