In the event of regaining our freedom and a return to normal levels of activity, there is an almighty tax bill to be paid. No one knows how this will be done, but the collision repair market needs to consider it has several vulnerabilities.
Firstly, the businesses are classically considered to be “small,” which is the bedrock of the UK economy. Secondly, the business consumes more gas and electricity than many other types of small business, which means any increased in energy tax will hit the bottom line harder than other businesses. Thirdly, the core business is about repair, and that means in spite of repair, there is a significant waste stream.
One idea, as part of the green movement, is to charge for every aspect of activity. Decoding this, it means for every single new part ordered, the materials, the energy used to process the materials, the packaging, the transportation and more, each attract a tax based on the “carbon” generated. The shorthand “carbon” refers mainly to carbon dioxide, seen as a negative influence on the earth’s climate even though it occurs naturally. The idea is to make us consider where we get things from, how we use materials/energy and to address some commerce which is currently subsided by certain governments.
No one knows if a carbon-based taxation system will ever see the light of day, but if it does, the collision repair business will get not one but two hits – the parts/paint used, and the energy used. Certainly, the huge expansion of HM government debt has made all possible routes to raise tax more possible than ever before.
Turning things inside out
If we think about how we lived a decade ago, or more, our daily life does change anyway. In 2005 Mark Zuckerberg was a Harvard University student and winnable banker, on the lookout for a quick buck. Mark is now of the richest people on the planet. In 10 years he might be president of the Diverse States of North America, or simply a fading echo on the next big platform. That’s the joy. We just don’t know the future.
We need to think about what mitigating business risk, and waste is certainly a risk. Not only does the collection of waste cost more each year, but that waste is taxed thanks to “landfill tax” Waste is way more than what ends up in the bins, it’s the very way we operate the business.
By Andrew Marsh