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Supermarkets are amongst a group of retailers that avoid VAT by selling goods direct from the Channel Islands using a concession known as Low Value Consignment Relief. By doing so they are able to price lower for products delivered by mail order than they or their high street competitors can do.
You only need to watch the BBC’s series ‘Turn Back Time - The High Street’ to see how a well run high street can build community spirit - and how easily it is lost. With a mix of the usual big shops and a nice collection of small independents selling goods you’re very unlikely to find anywhere else, high street shops can also help local producers: if you visit a good butcher, he’ll not just stock the usual supermarket cuts, but nearly every part of the animal and be able to tell you how to cook it. Charity shops get a better deal than most on rent and rates in town centres, but what about ‘make do and mend’ trades like dressmakers, blacksmiths and cobblers - could they not qualify for these breaks too?
As Tom Herbert, co-presenter of the series, from Hobbs House Bakery in Nailsworth says: “When we choose the convenience and cheapness of the supermarkets, we lose the quality and customer service found in our high streets. Shopping has reached a cross roads. More people are now grocery shopping online but no one loves the manipulation and monotony of giving our money to unaccountable multiples. We enjoy sharing our time with passionate, knowledgeable shop keepers, but we can't have it both ways, it's not sustainable. You can make a huge contribution to the future vitality of our high street by simply asking yourself, "can I get what I need from a local independent?" It’s a rewarding adventure to reconnect with the people locally that have already invested in making where you live, your town, a great place to visit, and the more we do it the better it'll get.” Supermarkets and malls have many fantastic advantages, like free parking, convenience and great prices, but the main advantages they have over independent retailers are huge buying power and the ability to avoid paying tax.
Ian Selwood of Randall & Payne Accountants thinks the supermarkets are becoming too powerful: “They are slowly killing the high streets and with that the character of British towns. They need to remain within the UK to supply food and should therefore make an appropriate contribution to society. Using VAT loopholes in this way gives them and other direct mail retailers an unfair advantage.
” There is a place for supermarkets, but they shouldn’t have the monopoly, the effect on producers’ incomes or the tax breaks they have now. As Ian Selwood says: “A supermarket supertax may be appropriate to curb their buying power and their abuse of tax loopholes.”
For more information contact Ian Selwood on 01242 548600
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