Life’s tough on the high street, even with the UK’s burgeoning coffee shop culture. Business costs are higher than ever, with the combination of shop rents, business rates and, if you’re lucky enough to make a healthy profit, corporation tax on anything you walk away with. For once, the government’s autumn budget has brought a little light relief to high street coffee shops.
Chancellor Philip Hammond has pledged a £1.5 billion boost to small businesses on the high street. The first part is £900 million in business rates relief, the second a £650 million fund to rejuvenate high streets.
The Treasury claims that 90% of small retailers – shops with a rateable value of £51,000 or less – will see some benefit, with reductions in business rates of up to a third.
The really painful thing about business rates is the way they’re linked to the Valuation Office Agency’s assessment of the market rental value of the shop. So, the higher the rent you’re paying (and the better the site, the more you’ll pay), the higher your business rates will be.
This tweak to small business rates isn’t enough to save the high street, of course, even if it saves you several thousand in taxes. The frankly rather small £650m pledged to high street redevelopment (small, when you think about how many high streets there are in the UK and how much that really means per town) won’t do a great deal either, but it’s a step in the right direction. The trend, though, as the amount of retail on our high streets gets smaller, is for more residential development above shops and close to towns. That’s good news for high street coffee shop owners, of course, because that means more potential customers right on the doorstep, looking for places to socialise and relax out of home.
If you’re thinking of starting a coffee shop business, or you’re reviewing your current costs, do check you’re paying the right business rates, do talk to a commercial property surveyor about your shop lease (to be sure you’re not paying over the odds), and do look at the most cost-effective coffee machine leasing, to make sure you’re getting maximum value for maximum quality.