Jeremy Hunt’s pledge to scrap tax for a bunch of small businesses is an interesting and practical pledge to support small businesses, UK high street businesses. This, from The Telegraph:
Jeremy Hunt has pledged to exempt hundreds of thousands of firms from business rates if he becomes prime minister, in a bid to save Britain’s ailing high streets.
In an extension of Philip Hammond’s £1.5bn plan to regenerate town centres across the country, the Tory leadership contender intends to scrap taxes for nine out of ten high street shops.
The move will save newly exempted businesses up to £6,500, and will benefit an estimated 24,500 businesses based in Birmingham, Manchester and three other large English cities.
The announcement builds on his recent promise to cut corporation tax from 19 percent to as low as 12.5 percent, the same as Ireland, a policy which is set to cost an estimated £13 billion a year.
Plenty of Aussie retailers would agree with this:
“It was once said Britain was a nation of shopkeepers. But if we don’t act this will no longer be the case
“Too many small businesses are being put out of business by tax bills they can’t afford to pay. “While many people choose to shop online, there is a clear demand for a local choice too.
“And the current system leaves the taxpayer out of pocket, shopkeepers out of a job and can deprive local people of places to spend time with friends and family.”
What I like about this announcement is the specific detail. It goes beyond the usual platitudes of small businesses are the backbone of the country during cam pains followed by years in government of inaction.
The UK business rate system has been a target for politicians for years. Their actions have created an inequitable mess. This would add to the mess.
The real solution is well known. Kill business rates and replace with 2 taxes.
Land value tax paid by landlord whether property is let or not and no exemptions . That will result in property being more efficiently used.
Sales tax with no exemptions or deductions. That will snare the on line businesses who currently do not pay their fair share.
Same principles should apply to Australia. In Adelaide there are 1000’s of empty shops some of which have empty for years. Some streets continuously have vacancy rates of 30% or more yet businesses continue to face rents that are artificially high. Landlords need to be incentivised to have occupants and disincentivised to keep property vacant.
Small businesses don’t need hand outs they just need a level playing field. That means tackling landlords and online businesses, not just in UK.