Give our hardest hit shopkeepers a break

THE row of shops at Market Place in Hatfield, Hertfordshire, isn’t attractive. The black cladding and railings are a bit shabby and some of the shop fronts could do with a lick of paint.

Even so, the nail salons, takeaways and hairdressers are wellused by the local community.

We all know a shopping parade like this, and probably take it for granted, but it’s under serious threat.

As we reveal today, hundreds of stores like those in Hatfield may be forced to shut by a crass review of property taxes.

The problem is these socalled business rates bear no relation to the shopkeepers’ income or profit. Rather, they are based on the rent that the building could generate if it was let to a tenant.

As a result, shopkeepers who happen to trade in areas where the property market has boomed face tax hikes of up to 3,000 pc. That means paying thousands more to HM Revenue & Customs even if profits have barely increased for decades.

It won’t come as a surprise that these tax hikes are a legacy of George Osborne’s final Budget as Chancellor in 2016. Yet even though Philip Hammond seems keen to distance himself from his predecessor, so far our new Chancellor has been reluctant to cancel the plans. Since Money Mail launched the Save Our Shops campaign earlier this month, nearly every national newspaper has reported on the business rates furore. Mr Hammond and his henchman Sajid Javid, the Communities Secretary, have repeatedly claimed that the reforms are ‘tax neutral’, meaning businesses in poorer areas will pay less while those in wealthier areas pay more. But that won’t keep afloat half a million shopkeepers in the Home Counties, Cornwall and parts of Yorkshire where property prices have leapt in the past seven years, but profits have not. Once again, the ministers responsible for handing out this tax blow are too caught up in their Westminster bubble to realise what they’re doing.

It’s all very well saying there will be winners, but one High Street bled to death is one too many. So, what can be done? Short of getting rid of business rates altogether (now wouldn’t that be a thing?), the Government could ease the burden on shopkeepers facing the largest rises.

For example, it could raise the threshold at which a firm pays the taxes from £12,000 to £100,000. That would free up money for firms to pay staff and invest in their business.

Even if the threshold was moved to £40,000, all the stores in Hatfield’s Market Place would be lifted out of the tax.

For the extra cash needed to pay for this, the Treasury should turn to the likes of Amazon, who employ armies of people to manipulate the tax system to their advantage. As Money Mail reported last week, many online retailers will see business rates fall because their warehouses are in rundown areas.

Business rates are an awful tax that needs a radical rethink in the long term. The tax should really be based on earnings and profits — if it exists at all.

ATM answer

THANKS for the responses to last week’s cash machine puzzle.

Jeaneatte Littley, from Kent, raises the prospect that our reader’s £200 might have popped out while he was in the branch complaining that the ATM had left him out of pocket.

Around 15 years ago, Jeaneatte went to withdraw cash from an Abbey National ATM in Maidstone and found £100 hanging out.

She waited in vain for the previous customer to return before handing in the notes to the branch receptionist. ‘ She proceeded to interrogate me as if I had done something wrong,’ says Jeaneatte. ‘I said I wanted the bank to trace the owner of the money and told her which machine it was and the time I had taken my money, so it would be easy for them to trace.’

Despite leaving her details, Jeaneatte heard nothing until she returned to the branch a few weeks later.

‘They said there was no way the owner could be traced, even though they knew the place and time, so they had put the money into a “special” account. In other words, the bank kept it,’ she says.

When I questioned Santander, which now owns Abbey, it said around ten years ago it introduced a ‘trace function’ that enables the bank to reunite customers with uncollected cash if a passer-by such as Jeaneatte hands it in.

Quite why that couldn’t have been done anyway is a mystery.