Business rate increases “threaten survival” of UK’s small shops
Small shops expecting to grow has dropped dramatically from 66% in 2016 to just 42% in 2017
Incoming increases to business rates are a threat to the survival of the UK’s small shops, according to insurance services provider AXA, sponsor of this year’s Startups 100 index.
Research has suggested a 10% decline in the number of small shops over the last decade, at the mercy of increasing financial pressure. At the end of 2016, almost 8% said they expected their business to go under, compared to an average of 3% across all other small business sectors.
There was also a significant decline in hiring plans, dropping from 15% at the start of 2015 to 9% this year, while the proportion of small shops expecting to grow declined even more dramatically from around 66% in 2016 to just 42% in 2017.
The report estimated that the average annual income for small shop owners working full time is £15,657, which works out to barely above minimum wage (£7.56) when broken down by average hours worked.
The news comes just days after the Federation of Small Businesses (FSB) called on the government to raise the rates threshold to £20,000 for small businesses in inner London.
Darrell Sansom, managing director at AXA Business Insurance, commented:
“Each time a local shop, hairdresser or pub shuts down, local people lose another bit of their heritage and community life. Our small shop surveys reveal that many are hanging on and simply do not have the spare income to cope with the 180% tax increase expected in some areas of the country.
“The years of crisis and austerity have been deeply unkind to local shop communities, and while they struggle on with such goodwill, it is a shame to witness further burdens placed on their shoulders.”