Business Rates relief for Charity Shops. A good thing?

[kulture]

I have no objection to charity shops in general. It's just if one opened next door to me and sold the same stock as me.

In my town a few years ago a charity shop started selling fishing rods and other fishing stuff next door to a sports shop. Sports shop went bust. Charity shop then stopped selling the fishing stuff.

Unfair competition.

 

[jarod74]

Billmccallum

I object slightly to the term "Limited access to information you may have had", I was there, I was told & shown the figures by the Manager. I witnessed her `putting money in the till` to make the weekly sales target. I was also aware of the waste that went on, far too many clothes going to rags, Items being binned simply because the store didn`t sell them - mainly kids toys. The shop had a full time manager & that was it. I have to declare an interest of sorts, I did prior to leaving apply for a `deputy managers` post at another store. I was told In no uncertain terms that I wasn`t qualified enough (by the area manager) the `most` I could apply for was a part time sales assistant, this despite 20 years in retail, working for the Post office as a counter clerk & working for the `biggest` retailer Asda/ Walmart & in the Charity shop itself 4-5 full days a week.

I agree that there is a place for Charity shops on the high street & yes I do buy from seven or eight here in the town where I live. I have no interest in the rate relief debate, I was simply pointing out my experience at the shop I worked in. I later found out, a couple of other Charities did pay for travelling expenses and such. Barnardo`s sadly seemed a bit ruthless compared to others.

 

[buzzlightyear]

I had o sign up, Charity shops take over the High Street because of the free rates. Simple as that. Free Rates, Free Staff, Free Stock, ok they may employ a "manager" at minimum wage. They have a very unfair advantage, and the amount of money that makes it's way to the charity is minimal. They are businesses no more, no less, and as such should play by the same rules.

The independent sole trader isn't "raking" it in, he/she is probably working for the HMRC, Landlord and Supplier and if they are lucky - in todays climate - making a very few pounds to take home. Of course they are expected on top of this to contribute to every local school, cubs, brownies, club etc that is going just because they have a shop - and independent shops are easier to approach than the nationals.

If all the independents vacated the town so many local "good" causes would lose out. The national and big businesses give sod all to the local community. Oh the town Tesco will dress up like fools for a day and take your money, then give it to a international charity - hardly helps YOUR town does it, unlike the independents.

 

[mhall]

I was keeping out of this thread because of bias, I'm an ex-charity manager and ex- charity shop manager (and my wife is also a charity shop manager).

But this comment did touch a nerve, volunteering for a year in a charity shop does not really give insider knowledge, it gives some insight based on the limited access to information that you may have had.

Most charity shops exist on turnover of £4,000 per week or less, most retaillers will know that a high street store would need to do double that to make it really viable.

The majority of that income would be spent on the shop, rent, utilities, etc and staff wages (most do employ at least 1 full-time manager and 1 part time deputy), probably 40% of the income would be passed on to the charity for the charitable work they do.

A business cannot be a charity, charity shops are just a fundraising mechanism, one of the many routes to generating income that they use.

Without charity shops, the high street would be a less than attractive street scene, with many more for sale signs than we have now.

Charity shops employ thousands of people around the country, who then spend their cash in the shops of other retaillers.

Where charity shops do sell new goods, where do they get them? other companies who sell to the trade....

Charity shops do use volunteers, but they also provide valuable training to young people, people with learning difficulties and opportunity for people on community service orders to repay the community....but they also pay tax and NHI, they dont get a pass on those.

Where charity shops sell new goods they have to pay VAT like the rest of us, adding to the public purse.

There are pro's and con's in the debate about rate relief, no amount of debate will resolve it, some will agree some wont.

I know dozens of small retailers who would love to take £4,000 a week

And let's face it, with the rates relief, donated stock, usually cheaper rent and volunteers to support the poorly paid staff, you would have to be REALLY crap not make a good profit.

 

[Esk247]

Most charity shops exist on turnover of £4,000 per week or less, most retaillers will know that a high street store would need to do double that to make it really viable.

£4,000 a week???? Woah! That's 208k a year turnover. Not a chance unless its November/December time. The small high street shops are lucky to turnover 2k a week giving around 100k a year turnover minus stock, minus rates, rent, services, wages.

Rent and rates on a small unit just off the high street equate to 20k a year minimum.

The big name charity shops don't even have to pay for staff until you get to Assistant Manager level and around here that's only 16k a year. Manager rates are around 20k a year. Area Managers are around 30k a year.

Some of the retail outlets in shopping centres only turnover £700 a week in the rubbish quiet months.

 

[kelvin1950]

I was keeping out of this thread because of bias, I'm an ex-charity manager and ex- charity shop manager (and my wife is also a charity shop manager).

But this comment did touch a nerve, volunteering for a year in a charity shop does not really give insider knowledge, it gives some insight based on the limited access to information that you may have had.

Most charity shops exist on turnover of £4,000 per week or less, most retaillers will know that a high street store would need to do double that to make it really viable.

The majority of that income would be spent on the shop, rent, utilities, etc and staff wages (most do employ at least 1 full-time manager and 1 part time deputy), probably 40% of the income would be passed on to the charity for the charitable work they do.

A business cannot be a charity, charity shops are just a fundraising mechanism, one of the many routes to generating income that they use.

Without charity shops, the high street would be a less than attractive street scene, with many more for sale signs than we have now.

Charity shops employ thousands of people around the country, who then spend their cash in the shops of other retaillers.

Where charity shops do sell new goods, where do they get them? other companies who sell to the trade....

Charity shops do use volunteers, but they also provide valuable training to young people, people with learning difficulties and opportunity for people on community service orders to repay the community....but they also pay tax and NHI, they dont get a pass on those.

Where charity shops sell new goods they have to pay VAT like the rest of us, adding to the public purse.

There are pro's and con's in the debate about rate relief, no amount of debate will resolve it, some will agree some wont.

Yeah, I wouldn't get out of bed for a measely 4 grand a week. Words fail me apart from that. :|

 

[DavidAshdown]

Charity shops are not all that they appear to be.

It's about time people people stood up to them !

 

[Talay]

... Without charity shops, the high street would be a less than attractive street scene, with many more for sale signs than we have now....

That simply is not true as the laws of supply and demand would come into play.

In the short term, I understand landlords would hold out for more rent than the market is willing to pay but without assistance in the form of rent rebates, the medium and longer term options would force landlords to reduce rents and consequently, to reduce the saleable price for commercial property. At lower rent levels, it would be profitable for retailers to return.

In my head, I have rates at around 50% of rent, give or take. Thus on the sort of places I look at, with rents in the £25-40k range, the median rates are around £17.5k. An 80% reduction is therefore worth in the region of £15,000 per year.

For many small businesses, £15,000 is way past the point where they decide to stay open, to close or not to bother in the first place.

 

That simply is not true as the laws of supply and demand would come into play.

It has and is.

The idea that there is going to be a recovery,don't look likely to me.

What with the supermarkets and the likes of Amazon e.t.c

There is no plan to recover anything in the UK that I have seen.?

 

[Billmccallum]

That simply is not true as the laws of supply and demand would come into play.

In the short term, I understand landlords would hold out for more rent than the market is willing to pay but without assistance in the form of rent rebates, the medium and longer term options would force landlords to reduce rents and consequently, to reduce the saleable price for commercial property. At lower rent levels, it would be profitable for retailers to return.

In my head, I have rates at around 50% of rent, give or take. Thus on the sort of places I look at, with rents in the £25-40k range, the median rates are around £17.5k. An 80% reduction is therefore worth in the region of £15,000 per year.

For many small businesses, £15,000 is way past the point where they decide to stay open, to close or not to bother in the first place.

My comments are personal opinion, based on may years experience in the charity sector, nothing more.

 

[Esk247]

It has and is.

The idea that there is going to be a recovery,don't look likely to me.

What with the supermarkets and the likes of Amazon e.t.c

There is no plan to recover anything in the UK that I have seen.?

The high street can survive. It is still wanted. It has opportunities that online retailers don't have e.g. touch and feel, instant purchase right in the shop.

I just think that a) a lot of retailers are missing opportunities and b) retailers are not being helped by ridiculous rates and rents.

I have more of a problem with rates at the moment actually. To think we pay rates for an office but don't actually use anything from the council e.g. we don't use the bins, all of our paper and card is recycled..by us. So why do i have to pay a few grand a year in rates?

Same with the shop. 15k a year rent. 10k a year rates. For what? a bin round the back that they don't even empty all the time, and the rates are going up too.

 

[Talay]

It has and is.

The idea that there is going to be a recovery,don't look likely to me.

What with the supermarkets and the likes of Amazon e.t.c

There is no plan to recover anything in the UK that I have seen.?

At current rent and rates levels you would have to agree because the risk is too great for the potential reward given as you rightly put it, the impact of Amazon and supermarkets expanding into almost every area of commerce.

Yet, were landlords faced with the option of accepting nothing, forever, and being forced by the council to take on tenants at auction or face compulsory purchase, then they would simply have to take the rents offered. At those lower rent levels, even if rates were never reduced, there would eventually be a level of rents at which equilibrium is re-established for businesses which work in bricks and mortar.

 

At current rent and rates levels you would have to agree because the risk is too great for the potential reward given as you rightly put it, the impact of Amazon and supermarkets expanding into almost every area of commerce.

Yet, were landlords faced with the option of accepting nothing, forever, and being forced by the council to take on tenants at auction or face compulsory purchase, then they would simply have to take the rents offered. At those lower rent levels, even if rates were never reduced, there would eventually be a level of rents at which equilibrium is re-established for businesses which work in bricks and mortar.

Or redevlope into housing as that seems where the market is.

many of the villages and industrial complexes near me have nearly disappeared.

I suspect town shops will still exist in larger places but my guess is they will be much reduced in tune with the supermarkes ,out of town shopping places and the internet.

Although I myself won't like it,from an economic point of view it may be good for the country,as at present far to much labour is wasted in the retail side of our economy.

We need to make products that we can sell abroad,rather than sell goods to each other.IMHO

 

[Esk247]

We need to make products that we can sell abroad,rather than sell goods to each other.IMHO

Too true. It doesn't help that the government (Lab or Con) don't seem to grasp that concept. They are all to willing to slap taxes, NMW increases and PAYE on to businesses and employees, making start-up manufacturing here seriously hard going.

They've offered subsidies but only to massive international manufacturers, not British start-up manufacturers who only want to employ 3/4 people initially.

 

[Thinehost]

It's a reflection of the tough trading times and the changing face of retail that is having an effect on the high street. Since we started our shop, our small town now has at least 8 charity shops, taking over premises which were the homes of a good variety of independent local stores.

I'd love to believe that the pendulum will swing the other way and that shops once again could be inhabited by real businesses which support local manufacturers and employ local people - but I may be living in cloud cuckoo land. Till we've sorted out the problem of how to compete for manufacturing jobs in a global economy where there are still highly motivated, intelligent, ambitious employees prepared to work for lower wages than we are prepared to accept, then we're stuffed.

OK, I know that's an exaggeration, but the state of the high street today is partly to do with the unwillingness of our customers to pay for goods manufactured in the UK because they're quite often much more expensive than the imported equivalent.

I hate seeing our town centre being taken over by charity shops. I would rather, though, see the shops occupied than empty. Nor would I like to see our town centres reverting to living accommodation because I feel a lot of them would be soulless places to live.

I believe there is a place for charity and that raising money for good causes is essential because it allows us a way of influencing the areas which government doesn't always handle well. However, we've got to find ways to make our commercial premises profitable, employing people and paying our way. I don't believe there is a single, simple answer of how to achieve this and, well-meaning as she may be, I don't think Mary Portas has the answer either.

Rates relief for charity shops? IMHO, that's like worrying about an ice fall from the huge iceberg that's about to sink us.

Margaret

 

[Talay]

Perhaps one answer would be to limit relief to those charities which spend 100% of their profits in the UK on UK people. Those charities who choose to send money raised out of the UK whilst people starve here in Blighty should be forced to pay full taxes.

 

[kulture]

Not sure many people starve in the UK

 

[Talay]

Not sure many people starve in the UK

Foodbank usage has increased exponentially as people cannot afford even food basics. Suckled at the teat of Loony Labour for a decade and a half, people cannot stand on their own two feet any more.

http://www.guardian.co.uk/news/datablog/2012/oct/16/food-banks-trussel-trust-uk-data
http://www.buryfreepress.co.uk/news/letters/foodbank-is-a-disgraceful-sign-of-the-times-1-4367561
http://www.worksopguardian.co.uk/news/local-news/a-new-home-for-town-s-food-bank-1-5020308

 

[printed_com]

I think its worth stopping and thinking about what Charity's are about. They're there to help those in need, it makes sense that they are helped - i say this as we also try to support registered charities with discount.

 

[andygambles]

Not sure many people starve in the UK

As pointed out for a 'First World' country it is shockingly bad how many people do actually starve in this country.

 

[kelvin1950]

I think its worth stopping and thinking about what Charity's are about. They're there to help those in need, it makes sense that they are helped - i say this as we also try to support registered charities with discount.

Even when they set up a couple of doors away from your business, stocking the same products as you at cheaper prices (due to their discounts because "we're a charity"), and then ask if you'll put one of their collecting boxes on your counter?

Would you still feel the same way about them then?

 

[DavidAshdown]

The trouble is, too many people believe that if the word 'charity' is involved then it has to be OK !.....bless them !!

 

[DavidAshdown]

I think its worth stopping and thinking about what Charity's are about. They're there to help those in need, it makes sense that they are helped - i say this as we also try to support registered charities with discount.

'There here to those in need'........Is that before or after themselves ???

 

[internetspaceships]

As pointed out for a 'First World' country it is shockingly bad how many people do actually starve in this country.

Really? Show me please because I'm finding it hard to grasp this one Andy.

 

[kelvin1950]

Really? Show me please because I'm finding it hard to grasp this one Andy.

Edwina Currie says none and the Daily Mirror says 1,000,000 children. So, somewhere in between these two figures I guess.

 

[Esk247]

Really? Show me please because I'm finding it hard to grasp this one Andy.

http://www.guardian.co.uk/society/2011/oct/01/sharp-rise-demand-food-handouts

Britain has seen a sharp increase in the number of people unable to afford to feed themselves at the most basic level, thanks to the worsening economic climate and changes to the benefit system, according to a survey by a leading food charity.

I believe it is quite widely known that parts of the UK are now struggling with the cost of basic food e.g. bread, milk.

"People in our communities are going to bed hungry because they can't afford to feed themselves," said Lindsay Boswell, chief executive of FareShare.

There are also Food Banks:
http://www.trusselltrust.org/foodbank-projects

 

[internetspaceships]

Thanks for that. I know it's likely to be a light the blue touch paper comment but would issuing foodstamps rather than cash in the benefits system cut down those numbers?

 

[DavidAshdown]

Edwina Currie says none and the Daily Mirror says 1,000,000 children. So, somewhere in between these two figures I guess.

Thats a small exaggeration for a tabloid paper !

 

Edwina Currie says none and the Daily Mirror says 1,000,000 children. So, somewhere in between these two figures I guess.

Edwina Currie did she not have something to do with rotten eggs?

I believe she also said there was Salmonella in some poultry products.

Can't imagine how this brain transplant victim could know anything about hunger.?:|

 

[andygambles]

Thanks for that. I know it's likely to be a light the blue touch paper comment but would issuing foodstamps rather than cash in the benefits system cut down those numbers?

I have often believed the same. I do believe we should do more to help those in need but is cash the answer?

No doubt it is against someone's human rights to not have sky tv.

 

[DavidAshdown]

Someone in need is often a pain indeed !

Nothing wrong with charity unless of course it's fazed in disguise !!!

 

[herewegoagain.]

As has been said here before. It is not the individual charity shops that are the problem. The problem is when they start becoming real retailers and directly competing by buying in new stock from the same suppliers. Rather than stocking by contribution.

Then there is the problem when a town center becomes over filled with charity shops and ALL loose out.

Well Said Kulture !!

Great posts by all by the way...

Here's my take on it all...

MOST charities do a great job - but regarding their shops they have massive advantages over ordinary shops....

Through their large discount on rates -
By reduced rents -
Large charities can get the units small business can only dream of affording -
No (used) stock to buy) - FREE STOCK TO SELL !!
No wages to pay (Managers / Area Managers excepted)
No holiday pay to pay
No PAYE to pay
No NI to pay
No VAT on second hand goods??

A BHF furniture charity shop opened near me - 3 doors down from a normal retail second hand shop - hardly fair is it??

Heres the real problem I have - they sell NEW goods discounted - this should be stopped - I am all for a level playing field - but charities literally do have 'their cake and eat it !'

I previously tried to get a unit in Long Eaton (Nottingham) - this high street literally is 'charity shop central' - there are easily at least 25 along the high street - another charity shop got the unit - pushing another small business out...

No one should be fooled - charity shops are massive businesses - when it comes to small business - charity should begin at home !!!!

 

[herewegoagain.]

I had o sign up, Charity shops take over the High Street because of the free rates. Simple as that. Free Rates, Free Staff, Free Stock, ok they may employ a "manager" at minimum wage. They have a very unfair advantage, and the amount of money that makes it's way to the charity is minimal. They are businesses no more, no less, and as such should play by the same rules.

The independent sole trader isn't "raking" it in, he/she is probably working for the HMRC, Landlord and Supplier and if they are lucky - in todays climate - making a very few pounds to take home. Of course they are expected on top of this to contribute to every local school, cubs, brownies, club etc that is going just because they have a shop - and independent shops are easier to approach than the nationals.

If all the independents vacated the town so many local "good" causes would lose out. The national and big businesses give sod all to the local community. Oh the town Tesco will dress up like fools for a day and take your money, then give it to a international charity - hardly helps YOUR town does it, unlike the independents.

HERE HERE !! well said !! - the man on the street thinks because you have a business you are minted..... - how wrong can they be !!!

 

[herewegoagain.]

http://www.guardian.co.uk/society/2011/oct/01/sharp-rise-demand-food-handouts

Britain has seen a sharp increase in the number of people unable to afford to feed themselves at the most basic level, thanks to the worsening economic climate and changes to the benefit system, according to a survey by a leading food charity.

I believe it is quite widely known that parts of the UK are now struggling with the cost of basic food e.g. bread, milk.

"People in our communities are going to bed hungry because they can't afford to feed themselves," said Lindsay Boswell, chief executive of FareShare.

There are also Food Banks:
http://www.trusselltrust.org/foodbank-projects

At the risk of sticking my head above the parapet....

Where I live, a lot of people (working or not...) are on one or many forms of benefit.... - yes, their multiple children may be thin.... but....

They all have Sky TV, smoke like chimneys, drink like fishes, wear fake designer gear, have newer cars than me !.... perhaps, just perhaps, some of this money could be diverted to food??

 

[andygambles]

At the risk of sticking my head above the parapet....

Where I live, a lot of people (working or not...) are on one or many forms of benefit.... - yes, their multiple children may be thin.... but....

They all have Sky TV, smoke like chimneys, drink like fishes, wear fake designer gear, have newer cars than me !.... perhaps, just perhaps, some of this money could be diverted to food??

Yes I see this also.

However there are also those middle income families who are starting to seriously struggle. Families that were comfortable 5 years ago earning above the benefits threshold but following 5 years of stagnent wages and massive food price increases are now really feeling the pinch. Unable to downsize because nobody can afford to buy their home. These are starting to struggle.

This is in a way a first world problem. They are not yet homeless and things could be worse however if something doesn't change they will get in to more and more trouble.

 

[Esk247]

At the risk of sticking my head above the parapet....

Where I live, a lot of people (working or not...) are on one or many forms of benefit.... - yes, their multiple children may be thin.... but....

They all have Sky TV, smoke like chimneys, drink like fishes, wear fake designer gear, have newer cars than me !.... perhaps, just perhaps, some of this money could be diverted to food??

Are you mad...how would they be able to take the kids to Disney Land???!!!

As usual though, it isn't black and white..it's grey with a bit of blue and a bit of red thrown in.

I also see people who are classed as 'struggling'...the only thing i see them struggle with is the brand new 3D TV they ordered from Currys last week.

Equally though, the guy a few doors down who's quite elderly can't afford his heating bill this winter and has an old TV that doesn't work any more because the analogue channel has been switched off. He's pretty upbeat about the whole thing and said there was sod all on TV anyway so he's taken to hill walking now.

 

[herewegoagain.]

Yes I see this also.

However there are also those middle income families who are starting to seriously struggle. Families that were comfortable 5 years ago earning above the benefits threshold but following 5 years of stagnent wages and massive food price increases are now really feeling the pinch. Unable to downsize because nobody can afford to buy their home. These are starting to struggle.

This is in a way a first world problem. They are not yet homeless and things could be worse however if something doesn't change they will get in to more and more trouble.

Absolutely agree on this one Andy, sounds like my family !