High street woes

Most of us are familiar by now with the recent troubles on our high street- HMV, Jessops, Blockbusters. One by one falling prey to the administrator's axe. However, I was interested to read this article in the Daily Telegraph:

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9844112/We-are-fighting-in-the-trenches-says-Blockbuster-administrator.html

The article is an interview with Lee Manning- Accountant at Deloitte and appointed to lead the administration of Blockbusters. He makes the point, rather eloquently, that the mission of administration is that of rescue akin to 'fighting in the trenches and being shot from all sides.' Manning argues that there is a role for businesses like Blockbuster on the high street- albeit in a rather different form. The above businesses have failed to keep pace with 'click and collect' delivery methods. Manning states that different delivery methods (i.e. click and collect) have worked wonders for businesses like Argos who would not survive in its present form without it. Manning also points out that 'John Lewis is very good at using technology to get people into the shop. That way, bricks and mortar shops, still make sense.'

So there is hope for the high street (and of course the Landlords) yet.

However, Manning also takes a swipe at restrictive local authorities whose 'restrictive parking regimes' and 'vulture like ticketing practices have made popping down to the high street in a relaxed way a thing of the past.' He could also have mentioned business rates. As explained before, in an earlier post, business rates are a tax levied on commercial property to fund local services. In some areas they can be higher than rents. The next business rates revaluation is not until 2017. Business rates are a major expense for high street businesses- hence the campaign by high profile business figures to have them cut. That's not likely to happen at any time soon. However, Landlord and Tenant clients should be aware of any available reliefs. I shall summarise the reliefs briefly:

• Small business rate relief- if the rateable value of your business is £6000 or less you are eligible for 100% relief from business rates. This percentage decreases once the value of the property falls between £6001-12,000. You can also get rate relief if you own other properties and the rateable value of each of your other properties is less than £2600. The rateable values of the properties are added together and the relief will be applied to the main property. You should apply to your local council for small business rate relief

• Charitable relief- charities and amateur sports clubs can get up to 80% relief if a property is used for charitable purposes. Landlords and Tenants should check with their local council to see whether or not they are eligible for the relief. Clients should also check whether or not they are eligible for 'discretionary relief'' (up to 100%). This is sometimes provided by local councils to 'top up' certain reliefs to give businesses and charities extra help.

The dark cloud hanging over our high streets is unlikely to give way to a ray of sunshine any time soon. Restrictive parking, ticketing and business rates present a challenge for high street businesses. Advising clients of the above reliefs, will ensure that the battle fought in the trenches is both fought and won.

For more information on the author see my LinkedIn profile at: http://www.linkedin.com/profile/view?id=46743795&trk=tab_pro