Arya News - Small business owners in Britain may get some tax relief in Wednesday’s budget, but they say it will not be enough.
Birmingham, United Kingdom – Taking the reins of a family business can be a source of immense pride, but it also comes with enormous pressures.
When Supreet Suri’s father started a photography business in Birmingham 40 years ago, his hard work paid off and he expanded to four locations around the city.
Today, the family has just one shop, in a prime location in the city’s Kings Heath High Street. But Suri is now considering relocating.
The reason: It’s too expensive to continue the business there.
When Suri moved the business to its current site, it gave it greater visibility – but also much higher running costs.
“We are at a point now where we are seriously considering how do we get out of this space purely to reduce costs,” he tells Al Jazeera.
Despite having a loyal customer base, Suri says the financial rewards are increasingly difficult to find.
“We’re sort of working our fingers to the bone, and that’s the side that people don’t see.”
Living ‘month to month’
Suri’s experience reflects a broader struggle on Britain’s high streets as the government presents its budget on Wednesday, with attention focused on whether further relief from business rates could help smaller businesses.
Business rates are a property-based tax paid by businesses occupying commercial premises, although some smaller properties already qualify for relief.
For Suri, however, rates are only part of the problem.
A boarded-up building front in Birmingham where big businesses, higher taxes and online shopping are squeezing out independent retailers [Laura Goehler/Al Jazeera] There is also the rent, VAT – a type of sales tax – wages, pensions, the rising cost of energy and specialist materials, which are all eating into his earnings. Refilling one of his professional printers with ink, he says, costs about 2,000 pounds ($2,664).
“I pay myself less than the minimum wage [of 12.21 pounds ($16.26) per hour]”, he says when asked how much he earns. “When I say that I live month to month, I literally mean that.”
Another challenge Suri and other independent business owners face is competition from online retailers, which now account for 28 percent of UK retail sales.
King’s Heath high street faces the same challenges as many of Britain’s main commercial thoroughfares: a fight to remain relevant in an age where big businesses, higher taxes and online shopping are squeezing out independent retailers.
While small business owners on the high street face steeper costs, customers increasingly expect prices comparable to those online, even when they are paying for a specialist, personalised service.
“People come to me wanting the quality that we provide, but they want me to match online pricing, which I simply can’t do,” Suri says.
He understands that the cost-of-living crisis he is struggling with also affects his customers.
“You can’t blame the customer or the consumer for not being able to support your business all of the time,” he says, pointing to household living costs.
Decline of the high street
The pressures on retailers come as many customers are feeling increasingly despondent about the state of their high streets.
Boarded-up shopfronts are a more common sight. Pawnbrokers, betting shops, vape outlets, charity stores and big-chain retailers have moved into high street locations that small business owners can no longer afford. Nearly 14 percent of high street retail units are estimated to be vacant.
For many who once regularly used their local high street, this new reality has become a symptom of decline and depression, even putting them off going there in the first place.
“Years ago, you used to come and have a good look, whatever the weather,” one Birmingham shopper tells Al Jazeera. “But it’s just the same up here all the time now.”
Another says shopping online is increasingly preferable. “It’s more convenient as well. Sometimes you come out here and there’s no inspiration.”
Yet the same shopper says they want more distinctive local businesses and adds that the government should make it easier for entrepreneurs to open them.
A struggle to survive
These challenges go well beyond Birmingham.
At a parliamentary inquiry into revitalising Britain’s high streets earlier this month, the chief executive of the British Independent Retailers Association, Andrew Goodacre, argued that recent business rate reforms had failed to deliver the intended benefits for smaller retailers.
He told members of parliament that some independent shops are facing higher bills, even as a large supermarket near his home stood to pay substantially less.
The inquiry heard another troubling argument that legitimate businesses may also face unfair competition from operators which evade taxes. Politicians heard how some central London souvenir shops allegedly use successive limited companies to avoid paying tax, enabling them to pay rents that compliant businesses could not afford.
The evidence highlights the importance of enforcement alongside tax reform, and warnings that a cut in business rates alone will not stem the deterioration of Britain’s high streets.
That warning is echoed by Suri, who says a reduction in rates would be welcome but not enough.
“That’s a small step in the right direction,” he says. “But if the intention really is to help the high streets thrive, there’s a lot of change that needs to be made.”
His challenge to the UK’s Chancellor of the Exchequer is to spend a month or two running a real high street business and experience the pressures first-hand.
For a family business that has survived four decades, the question now is whether it can afford another year in the place it once hoped to grow.
“If [the government] makes it easier to actually run an independent business successfully, that’s the first domino in a positive effect that could really help our country.”