Welcome to the latest Linkibuzz!
Let’s begin this week’s roundup on a very positive note with our first story! Despite the market turbulence hitting hard on the UK this year, the majority of small businesses stood strong in face of economic uncertainty. Nonetheless, caution is always advised, as recent reports show that the increase in businesses rates may drive some shops to adjust their prices accordingly, as our second story goes to show.
Our third story concerns Tesco’s plan to build residential flats on top of some of its largest stores. An insane idea doomed for failure, or a potential real estate gamechanger? Only time will show (and in the meantime you can read all about it in the article).
Lastly, we talk about the prospect of fuel duty getting reduced by 3p, a move which could potentially save the British households a total of £1.9 billion.
We hope you enjoy this week’s reads!
It has been a difficult year, marked by unsettled political and economic events, and yet the small businesses of our country are pulling through. A nationwide report conducted by Hitachi Capital British Business Barometer discovered that 72 per cent of SMEs report barriers to growth, a drop of five percent since October. What’s more, it is only the businesses that have been trading for less than five years that are most likely to be experiencing barriers to growth (73 per cent). These numbers go to show that, while certainly not experiencing smooth sailing, UK’s small businesses are the most resilient to change and are well on the way to become the cornerstone of national economy in these trying times.
Taking effect in April next year, business rates in taxes are about to surge up a by £465.8m a year, amounting to a mind-blowing £2.3bn over the course of five years! The heavy blow will have a significant impact on British retailers, who pay this tax mostly for their shops and warehouses – a figure which, for the majority of them, exceeds their corporate tax. As a consequence, experts predict a domino effect will ensue, forcing retailers to raise the prices of their goods and services. And it doesn’t end here: the sterling plunge, which has made importing goods more expensive, as well as the raise in the national living wage, make for what Dave Lewis, the CEO of Tesco has called a “potentially lethal cocktail”. Mark Rigby of CVS is of a similar opinion: “A near half a billion pounds increase in business rates per year for the next five years is simply unsustainable. Something will have to give – whether that’s store closures or even higher prices at the till.”
Would you buy your flat on top of a Tesco supermarket building? Some people would, as they seem to think at the supermarket chain’s. By selling the so-called air rights to developers, Tesco could generate a total of up to £400m. The scheme is part of £1.5bn of fundraising targeted by Tesco, which also includes buying back some freeholds in a bid to reduce rent, reports The Daily Mail.
It is estimated that UK drivers pay £33 billion in fuel taxes each year. However, in an effort to boost the post-Brexit hampered economy, fuel duties might soon be lowered for 3p – a “tweak” that could add £850 million to GDP with no change in the net tax position. Following the Pre-Autumn Statement release, Chancellor of the Exchequer is looking to lower prices at the petrol pumps to steady the economy, as this drop in fuel duty would save the poorest 50 per cent of households on average £67, which amounts to or £1.9 billion in one year.
Our first story has hopefully set an encouraging tone for small business owners in the UK, which do not appear to be put off by the recent volatile political and economic events. The second story offered a note of warning to retailers that might have to raise their prices starting from spring next year, as the Government is looking to impose higher business rates on taxes. Meanwhile, Tesco is looking to sell their “air-rights” to real estate developers, which would mean that people could soon be living in residential flats on top of supermarket stores. And lastly, we talked about Chancellor of the Exchequer thinking about lowering the prices at the petrol pumps in order to stabilize the shaken economy.
Thank you for reading and see you again in a week!