Retail Giant HMV Faces £3.35m Tax Denial Before Collapse
- HMV denied £3.35m tax relief before administration
- Retail challenges contributed to HMV’s downfall
- Business rate levels affected HMV significantly
- Rateable values of 87 stores decreased by 19.4%
- Transitional Relief limited tax bill changes
- Stockport branch saw minimal reduction in tax bills
Music and film retailer HMV, which entered administration during the festive period, faced a series of retail challenges including high business rate levels. The company paid £15m on sales of £277m, with £1 in every £18.5 going towards property taxes. Real estate adviser Altus Group stated that HMV should have been a ‘winner’ under the 2017 business rates revaluation, as rateable values on 87 of its English stores fell by almost 19.4%. However, strict limits were imposed on tax reductions for firms facing increases. Transitional Relief, applicable only to English tax bills, revealed HMV was denied £3,349,035 in tax reductions for 2017/18 and 2018/19. The policy limits the change in tax bills annually due to revaluation, causing gradual changes. Stockport’s rateable value fell 53.44% but its bill only decreased marginally. Robert Hayton of Altus Group argued for immediate tax reduction based on rental values in struggling areas.
Factuality Level: 8
Factuality Justification: The article provides accurate information about HMV’s tax situation and the impact of business rate levels on their finances, as well as explaining the Transitional Relief policy and its limitations. It also includes expert commentary from Robert Hayton, head of business rates at Altus Group, providing a balanced perspective on the issue.
Noise Level: 6
Noise Justification: The article provides relevant information about HMV’s tax situation and the impact of business rate levels on their financial struggles, but it could benefit from more analysis or context on the broader implications of this issue for other businesses in similar situations.
Financial Relevance: Yes
Financial Markets Impacted: HMV
Financial Rating Justification: The article discusses HMV’s financial struggles and the impact of business rates on its tax liabilities, which affected its ability to stay afloat. This has implications for the company’s finances and potentially impacts the stock price or other related companies in the retail industry.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
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